IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA, ) ) )

Plaintiff, ) )

v. ) Civil Action No. )

DETROIT DIESEL CORPORATION, ) ) )

Defendant. )

CONSENT DECREE

I. JURISDICTION AND VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

II. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

III. APPLICABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

IV. FACTUAL BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

V. OBJECTIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

VI. REQUIREMENTS FOR ON-ROAD HDDES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

A. REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATES OF CONFORMITY . . . . . . . . . . . . 13

B. APPLICABILITY OF ADDITIONAL COMPLIANCE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . 14

C. ADDITIONAL REQUIREMENTS APPLICABLE TO LMB ENGINES ONLY . . . . . . . . . . . . . . . 15

D. ADDITIONAL REQUIREMENTS APPLICABLE TO TRUCK HHDDES ONLY . . . . . . . . . . . . . 20

E. AVERAGING, BANKING AND TRADING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

F. TNTE LIMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

VI-A.REQUIREMENTS FOR NONROAD CI ENGINES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

VII. FEDERAL CERTIFICATION, SELECTIVE ENFORCEMENT AUDITING,

ADMINISTRATIVE RECALL, AND RECORD KEEPING AND REPORTING

REQUIREMENTS ASSOCIATED WITH THE EURO III, NTE, TNTE, SMOKE (OR

ALTERNATE OPACITY) AND NOX PLUS NMHC LIMITS . . . . . . . . . . . . . . . . . . . . . . . . . . 30

VIII. COMPLIANCE AUDITING AND IN-USE TESTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

A. COMPLIANCE AUDITOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

B. IN-USE TESTING PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

IX. ADDITIONAL INJUNCTIVE RELIEF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

A. NONROAD CI ENGINE EMISSIONS STANDARD PULL-AHEAD . . . . . . . . . . . . . . . . . . . . . . 51

B. LOW NOX REBUILD PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

C. ADDITIONAL INJUNCTIVE RELIEF/OFFSET PROJECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

X. ADDITIONAL DATA ACCESS, MONITORING, AND REPORTING REQUIREMENTS . . 81

A. ACCESS TO ENGINE CONTROL MODULE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

B. COMPLIANCE REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

C. PROGRESS REPORTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

XI. NON-CIRCUMVENTION PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

XII. NOTICE AND SUBMITTALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

XIII. CIVIL PENALTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

XIV. STIPULATED PENALTIES AND OTHER PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

XV. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108

XVI. DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111

XVII. EFFECT OF SETTLEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

XVIII. RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

XIX. ACCESS TO INFORMATION AND RETENTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . 120

XX. NON-WAIVER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

XXI. THIRD PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

XXII. COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

XXIII. PUBLIC NOTICE AND COMMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

XXIV. MODIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

XXV. RETENTION OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

XXVI. EFFECTIVE DATE AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

XXVII. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

XXVIII. SIGNATORIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

WHEREAS, PLAINTIFF, THE UNITED STATES OF AMERICA, AT THE REQUEST OF THE ADMINISTRATOR OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY (“EPA”), AND BY AUTHORITY OF THE ATTORNEY GENERAL,

FILED THE COMPLAINT HEREIN AGAINST DEFENDANT, DETROIT DIESEL CORPORATION (“DDC”), A DELAWARE

CORPORATION, ALLEGING VIOLATIONS OF THE CLEAN AIR ACT, AS AMENDED, 42 U.S.C. §§ 7401 ET SEQ., (THE

“ACT”) IN CONNECTION WITH CERTAIN HEAVY-DUTY DIESEL ENGINES MANUFACTURED AND SOLD BY DDC, AND HAS

FILED SIMILAR COMPLAINTS IN RELATED ACTIONS AGAINST OTHER HEAVY-DUTY DIESEL ENGINE MANUFACTURERS;

AND

WHEREAS, DDC DENIES THE VIOLATIONS ALLEGED IN THE COMPLAINT; AND

WHEREAS, THE UNITED STATES AND DDC HAVE CONSENTED TO ENTRY OF THIS CONSENT DECREE

WITHOUT TRIAL OF ANY ISSUE; AND

WHEREAS, EPA IS CHARGED WITH PRIMARY RESPONSIBILITY FOR ENFORCING THE CLEAN AIR ACT; AND

WHEREAS, EPA HAS CONDUCTED AN EXTENSIVE INVESTIGATION OF THE MATTERS WHICH ARE THE

SUBJECT OF THE CONSENT DECREE; AND

WHEREAS, THE UNITED STATES HAS DETERMINED THAT THE COMPREHENSIVE RELIEF SET FORTH IN THIS

CONSENT DECREE WILL PROVIDE PROTECTION OF THE HEALTH AND WELFARE OF THE PEOPLE OF THE UNITED STATES;

AND

WHEREAS, THE UNITED STATES AND DDC AGREE, AND THE COURT BY ENTERING THIS CONSENT DECREE

FINDS, THAT THIS CONSENT DECREE HAS BEEN NEGOTIATED BY THE UNITED STATES AND DDC IN GOOD FAITH, THAT

IMPLEMENTATION OF THIS CONSENT DECREE WILL AVOID PROLONGED AND COMPLICATED LITIGATION BETWEEN THE

PARTIES, AND THAT THIS CONSENT DECREE IS FAIR, REASONABLE, AND IN THE PUBLIC INTEREST;

NOW, THEREFORE, BEFORE THE TAKING OF ANY TESTIMONY, AND WITHOUT TRIAL OR ADJUDICATION OF

ANY ISSUE OF FACT OR LAW AND WITHOUT THIS CONSENT DECREE CONSTITUTING AN ADMISSION BY ANY PARTY WITH

RESPECT TO ANY SUCH ISSUE, AND THE COURT HAVING CONSIDERED THE MATTER AND BEING DULY ADVISED, IT IS

HEREBY ORDERED AND DECREED AS FOLLOWS:

I.JURISDICTION AND VENUE

1. THIS COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF THIS ACTION AND THE PARTIES TO THIS

CONSENT DECREE PURSUANT TO 28 U.S.C. §§ 1331, 1345, 1355, AND TITLE II OF THE ACT, 42 U.S.C. §§ 7521-7590.

2. FOR PURPOSES OF THIS ACTION AND THIS CONSENT DECREE, DDC DOES NOT CONTEST THAT VENUE IS

PROPER IN THIS DISTRICT PURSUANT TO SECTIONS 204 AND 205 OF THE ACT, 42 U.S.C. §§ 7523 AND 7524.

II.DEFINITIONS

3. UNLESS SPECIFICALLY DEFINED IN THIS SECTION OR ELSEWHERE IN THIS CONSENT DECREE, TERMS USED

HEREIN SHALL HAVE THE MEANINGS CURRENTLY SET FORTH IN SECTIONS 216 AND 302 OF THE ACT, 42 U.S.C.

- 1 ­

§§ 7550 AND 7602, AND ANY REGULATION PROMULGATED UNDER TITLE II OF THE ACT, 42 U.S.C. §§ 7521-7590. THE

FOLLOWING DEFINITIONS SHALL APPLY FOR PURPOSES OF THIS CONSENT DECREE.

“ACT” MEANS THE CLEAN AIR ACT, AS AMENDED, 42 U.S.C. §§ 7401 ET SEQ.

“A,B&T” MEANS THE MOTOR VEHICLE ENGINE EMISSION AVERAGING, BANKING AND TRADING PROGRAM SET

FORTH IN 40 C.F.R. §§ 86.091-15, 86.092-15, 86.094-15, AND 86.004-15.

“AECD,” OR “AUXILIARY EMISSION CONTROL DEVICE,” MEANS ANY DEVICE OR ELEMENT OF DESIGN THAT

SENSES TEMPERATURE, VEHICLE SPEED, ENGINE RPM, TRANSMISSION GEAR, MANIFOLD VACUUM, OR ANY OTHER

PARAMETER FOR THE PURPOSE OF ACTIVATING, MODULATING, DELAYING, OR DEACTIVATING THE OPERATION OF THE

EMISSION CONTROL SYSTEM.

“CALIFORNIA SETTLEMENT AGREEMENT” MEANS THE AGREEMENT BETWEEN DDC AND THE CALIFORNIA

AIR RESOURCES BOARD RESOLVING CALIFORNIA CLAIMS WITH RESPECT TO MATTERS ADDRESSED IN THIS CONSENT

DECREE.

“CARB” MEANS THE CALIFORNIA AIR RESOURCES BOARD.

“CERTIFICATE OF CONFORMITY” OR “CERTIFICATE” MEANS A CERTIFICATE ISSUED BY EPA PURSUANT TO

SECTION 206 OF THE ACT, 42 U.S.C. § 7525.

“CONSENT DECREE” OR “DECREE” MEANS THIS CONSENT DECREE, INCLUDING THE APPENDICES

SPECIFICALLY IDENTIFIED HEREIN.

“DATE OF ENTRY” MEANS THE DATE ON WHICH THIS CONSENT DECREE IS ENTERED AS A FINAL JUDGMENT BY

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA.

“DATE OF FILING” MEANS THE DATE THIS CONSENT DECREE IS FILED WITH THE CLERK OF THE UNITED

STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA.

“DAY” MEANS A CALENDAR DAY. IN COMPUTING ANY PERIOD OF TIME UNDER THIS CONSENT DECREE,

WHERE THE LAST DAY WOULD FALL ON A SATURDAY, SUNDAY, OR FEDERAL HOLIDAY, THE PERIOD SHALL RUN UNTIL

THE CLOSE OF BUSINESS OF THE NEXT WORKING DAY.

“DEFEAT DEVICE” MEANS AN AECD THAT REDUCES THE EFFECTIVENESS OF THE EMISSION CONTROL SYSTEM

UNDER CONDITIONS THAT MAY REASONABLY BE EXPECTED TO BE ENCOUNTERED IN NORMAL VEHICLE OPERATION AND

USE, UNLESS:

(A) SUCH CONDITIONS ARE SUBSTANTIALLY INCLUDED IN THE FEDERAL EMISSION TEST PROCEDURE;

(B) THE NEED FOR THE AECD IS JUSTIFIED IN TERMS OF PROTECTING THE VEHICLE AGAINST DAMAGE OR

ACCIDENT; OR

(C) THE AECD DOES NOT GO BEYOND THE REQUIREMENTS OF ENGINE STARTING.

“EMISSIONS SURFACE LIMITS” MEANS THE EURO III TEST PROTOCOL-BASED MAXIMUM ALLOWABLE

EMISSION LEVELS SET FORTH IN PARAGRAPHS 14, 16, 17, 19 AND 20, AS DETERMINED IN ACCORDANCE WITH SECTION

1 OF APPENDIX C TO THIS CONSENT DECREE.

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“ENGINE REBUILD” MEANS AN ACTIVITY OCCURRING OVER ONE OR MORE MAINTENANCE OR REPAIR EVENTS

INVOLVING:

(A) DISASSEMBLY OF THE ENGINE, INCLUDING REMOVAL OF THE CYLINDER HEADS; AND

(B) THE REPLACEMENT OR RECONDITIONING OF MORE THAN ONE MAJOR CYLINDER COMPONENT IN MORE

THAN HALF THE CYLINDERS.

“EPA” MEANS THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.

“EURO III COMPOSITE VALUE LIMITS” MEANS THE EURO III TEST PROTOCOL-BASED MAXIMUM

COMPOSITE VALUE EMISSION LIMITS SET FORTH IN PARAGRAPHS 14, 16, 17, 19 AND 20, AS DETERMINED IN

ACCORDANCE WITH SECTION 1 OF APPENDIX C TO THIS CONSENT DECREE.

“EURO III LIMITS” MEANS, COLLECTIVELY, THE EURO III COMPOSITE VALUE LIMITS AND THE EMISSIONS

SURFACE LIMITS.

“EURO III TEST PROTOCOL” MEANS THE TEST PROTOCOL FOR MEASURING DIESEL ENGINE EMISSIONS

SPECIFIED IN SECTION 1 OF APPENDIX C TO THIS CONSENT DECREE.

“FTP” MEANS THE FEDERAL TEST PROCEDURE FOR HDDES SPECIFIED IN 40 C.F.R. PART 86.

“HDDE” MEANS A DIESEL (AS DEFINED IN 40 C.F.R. § 86.090-2) HEAVY-DUTY ENGINE (AS DEFINED IN 40

C.F.R. §§ 86.082-2(B)), FOR WHICH A UNITED STATES CERTIFICATE OF CONFORMITY IS SOUGHT OR REQUIRED.

“HHDDE” MEANS AN HDDE CERTIFIED AS A MOTOR VEHICLE HEAVY HEAVY-DUTY ENGINE IN ACCORDANCE

WITH THE DEFINITION OF “PRIMARY INTENDED SERVICE CLASS” IN 40 C.F.R. § 86.085-2.

“INTERIM ENGINES” MEANS ALL NEW ELECTRONICALLY CONTROLLED LMB ENGINES MANUFACTURED ON OR

AFTER NOVEMBER 1, 1998, UNTIL COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 16 ARE ACHIEVED; AND ALL

NEW ELECTRONICALLY CONTROLLED TRUCK HHDDES MANUFACTURED ON OR AFTER DECEMBER 31, 1998, UNTIL

COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 20 ARE ACHIEVED.

“LHDDE” MEANS AN HDDE CERTIFIED AS A MOTOR VEHICLE LIGHT HEAVY-DUTY ENGINE IN ACCORDANCE

WITH THE DEFINITION OF “PRIMARY INTENDED SERVICE CLASS” IN 40 C.F.R. §§ 86.085-2.

“LMB ENGINE” MEANS AN LHDDE OR MHDDE MANUFACTURED BY DDC, OR ANY HDDE

MANUFACTURED BY DDC AND OFFERED FOR SALE OR INTENDED FOR INSTALLATION IN AN URBAN BUS.

“LOW NOX REBUILD KIT” MEANS THE SOFTWARE AND/OR MINOR HARDWARE INCLUDED BY DDC IN A

REBUILD KIT OFFERED FOR SALE IN THE UNITED STATES FOR PURPOSES OF COMPLYING WITH SECTION IX.B.

“MAJOR CYLINDER COMPONENT” MEANS PISTON ASSEMBLY, CYLINDER LINER, CONNECTING ROD, OR PISTON

RING SET.

“MHDDE” MEANS AN HDDE CERTIFIED AS A MOTOR VEHICLE MEDIUM HEAVY-DUTY ENGINE IN

ACCORDANCE WITH THE DEFINITION OF “PRIMARY INTENDED SERVICE CLASS” IN 40 C.F.R. § 86.085-2.

“MODEL YEAR” MEANS (A) FOR ON-HIGHWAY ENGINES, THE PERIOD DEFINED AT 40 C.F.R. PART 85,

SUBPART X; AND (B) FOR NONROAD CI ENGINES, THE PERIOD DEFINED AT 40 C.F.R. § 89.2.

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“NMHC” MEANS NON-METHANE HYDROCARBON.

“NOX” MEANS OXIDES OF NITROGEN, AS DEFINED IN 40 C.F.R. § 86.082-2.

“NONROAD CI ENGINE” MEANS A COMPRESSION-IGNITION ENGINE SUBJECT TO THE REGULATIONS IN 40

C.F.R. PART 89.

“NTE LIMIT” MEANS THE NOT TO EXCEED EMISSION LIMIT, I.E., THE MAXIMUM ALLOWABLE NOX, NOX

PLUS NMHC, AND PM EMISSION LEVELS SET FORTH IN PARAGRAPHS 14, 16, 17, 19 AND 20, AS DETERMINED IN

ACCORDANCE WITH SECTION 2 OF APPENDIX C TO THIS CONSENT DECREE.

“NOX PLUS NMHC LIMIT” MEANS THE MAXIMUM ALLOWABLE NOX PLUS NMHC EMISSION LEVELS, WHICH

ARE SET FORTH IN PARAGRAPHS 17 AND 20 OF THIS CONSENT DECREE, WHEN AN ENGINE IS TESTED USING THE

APPLICABLE FTP.

“OPACITY LIMIT” MEANS THE MAXIMUM OPACITY LEVEL SET FORTH IN PARAGRAPHS 14, 16, 17, 19 AND 20

THAT IS APPLICABLE WITHIN THE NOT TO EXCEED CONTROL AREA SPECIFIED IN SECTION 2 OF APPENDIX C.

“PARAGRAPH” MEANS A PORTION OF THIS CONSENT DECREE IDENTIFIED BY AN ARABIC NUMERAL.

“PARTIES” MEANS THE UNITED STATES AND DDC.

“PM” MEANS PARTICULATE MATTER.

“PRE-SETTLEMENT ENGINES” MEANS ALL OF DDC’S ELECTRONICALLY CONTROLLED HDDES EQUIPPED

WITH THE ADAPTIVE TIMING STRATEGY OR OTHER ELECTRONIC STRATEGIES AND MANUFACTURED, WITH RESPECT TO

LMB ENGINES, PRIOR TO NOVEMBER 1, 1998, OR, WITH RESPECT TO TRUCK HHDDES, PRIOR TO DECEMBER 31,

1998. APPENDIX A TO THIS CONSENT DECREE LISTS DDC’S PRE-SETTLEMENT ENGINE FAMILIES.

“SECTION” MEANS A PORTION OF THIS CONSENT DECREE IDENTIFIED BY A ROMAN NUMERAL.

“SETTLING HDDE MANUFACTURERS” MEANS CATERPILLAR INC., CUMMINS ENGINE COMPANY, INC.,

DETROIT DIESEL CORPORATION, MACK TRUCKS, INC., RENAULT V.I., AND VOLVO TRUCK CORPORATION.

“SMOKE LIMIT” MEANS THE MAXIMUM EMISSION LEVELS SET FORTH IN PARAGRAPHS 14, 16, 17, 19 AND 20,

AS MEASURED IN ACCORDANCE WITH APPENDIX C, APPLICABLE WITHIN THE NOT TO EXCEED CONTROL AREA

SPECIFIED IN SECTION 2 OF APPENDIX C TO THIS CONSENT DECREE.

“TNTE LIMIT” MEANS THE “TRANSIENT LOAD RESPONSE NOT TO EXCEED LIMIT,” I.E., THE TNTE TEST

PROTOCOL-BASED MAXIMUM EMISSION LEVELS SET FORTH IN PARAGRAPHS 23 THROUGH 25 AND DETERMINED IN

ACCORDANCE WITH SECTION 2 OF APPENDIX C TO THIS CONSENT DECREE.

“TNTE TEST PROTOCOL” MEANS THE TEST PROTOCOL FOR MEASURING DIESEL ENGINE NOX PLUS NMHC

AND PM EMISSIONS DURING HARD ACCELERATIONS WHICH IS SET FORTH IN APPENDIX C TO THIS CONSENT DECREE.

“TRUCK HHDDE” MEANS AN HHDDE MANUFACTURED BY DDC, EXCEPT ANY HHDDE SPECIFICALLY

INCLUDED IN THE DEFINITION OF LMB ENGINE HEREIN.

“UNITED STATES” MEANS THE UNITED STATES OF AMERICA.

“URBAN BUS” MEANS AN URBAN BUS AS DEFINED AT 40 C.F.R. § 86.093-2.

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“USEFUL LIFE” MEANS THE APPLICABLE USEFUL LIFE OF AN ENGINE AS PRESENTLY DEFINED IN 40 C.F.R.

PARTS 86 AND 89.

III.APPLICABILITY

4. THIS CONSENT DECREE APPLIES TO AND IS BINDING UPON THE UNITED STATES AND DDC, ITS AGENTS,

SUCCESSORS, AND ASSIGNS. ANY CHANGE IN DDC’S OWNERSHIP OR CORPORATE OR OTHER LEGAL STATUS SHALL IN

NO WAY ALTER DDC’S RESPONSIBILITIES UNDER THIS CONSENT DECREE. IN ANY ACTION TO ENFORCE THIS CONSENT

DECREE, DDC SHALL NOT RAISE AS A DEFENSE THE FAILURE OF ITS OFFICERS, DIRECTORS, AGENTS, SERVANTS,

CONTRACTORS, OR EMPLOYEES TO TAKE ACTIONS NECESSARY TO COMPLY WITH THE PROVISIONS HEREOF.

IV.FACTUAL BACKGROUND

5. DDC HAS MANUFACTURED AND SOLD, OFFERED FOR SALE, OR INTRODUCED OR DELIVERED FOR

INTRODUCTION INTO COMMERCE IN THE UNITED STATES NEW MOTOR VEHICLE ENGINES, INCLUDING THE PRE­

SETTLEMENT ENGINES.

6. EACH CERTIFICATE OF CONFORMITY ISSUED TO DDC BY EPA DURING THE TIME PERIOD RELEVANT TO

THE CLAIMS ALLEGED IN THE COMPLAINT PROVIDES THAT THE CERTIFICATE COVERS ONLY THOSE NEW MOTOR

VEHICLE ENGINES WHICH CONFORM IN ALL MATERIAL RESPECTS TO THE ENGINE DESIGN SPECIFICATIONS PROVIDED TO

EPA IN THE CERTIFICATE APPLICATION FOR SUCH ENGINES, EXCEPT ANY CERTIFICATE OF CONFORMITY ISSUED BY

EPA FOR ENGINES DDC INTENDED OR INTENDS TO SELL ONLY IN CALIFORNIA PROVIDES THAT THE CERTIFICATE

COVERS ONLY THOSE NEW MOTOR VEHICLE ENGINES WHICH CONFORM, IN ALL MATERIAL RESPECTS, TO THE ENGINE

DESIGN SPECIFICATIONS DESCRIBED IN THE APPLICATION SUBMITTED TO CARB. IN ADDITION, EACH CONDITIONAL

CERTIFICATE OF CONFORMITY ISSUED TO DDC FOR MODEL YEAR 1998 SPECIFICALLY PROVIDES THAT THE

CERTIFICATE DOES NOT COVER ENGINES EQUIPPED WITH DEFEAT DEVICES.

7. DDC HAS INSTALLED ON ENGINES MANUFACTURED FOR SALE IN THE UNITED STATES CERTAIN COMPUTER­

BASED STRATEGIES TO ADJUST THE TIMING OF FUEL INJECTION ON ALL OF ITS PRE-SETTLEMENT ENGINES, INCLUDING,

BUT NOT LIMITED TO ADAPTIVE TIMING ON CERTAIN OF ITS PRE-SETTLEMENT ENGINES. THE UNITED STATES ALLEGES

IN ITS COMPLAINT THAT THESE STRATEGIES HAVE THE EFFECT OF ADVANCING INJECTION TIMING RELATIVE TO THE

INJECTION TIMING USED BY DDC TO CONTROL NOX EMISSIONS ON THE FTP. THE UNITED STATES FURTHER ALLEGES

THAT THESE STRATEGIES HAVE AN ADVERSE EFFECT ON THE ENGINE’S EMISSION CONTROL SYSTEM FOR NOX, THAT

THEY WERE NOT ADEQUATELY DISCLOSED TO EPA, THAT THEY ARE DEFEAT DEVICES PROHIBITED UNDER THE ACT,

AND THAT THESE ENGINES ARE NOT COVERED BY AN EPA-ISSUED CERTIFICATE OF CONFORMITY.

8. DDC DENIES THE MATERIAL ALLEGATIONS OF THE COMPLAINT AND CONTENDS THAT ITS ENGINES FULLY

COMPLY WITH NOX EMISSIONS LIMITS, THAT IT FULLY AND ADEQUATELY DISCLOSED ITS EMISSION CONTROL SYSTEMS

TO EPA, THAT IT DID NOT EMPLOY DEFEAT DEVICES PROHIBITED BY THE ACT, AND THAT THESE ENGINES ARE

COVERED BY AN EPA-ISSUED CERTIFICATE OF CONFORMITY.

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V.OBJECTIVES

9. DDC HAS REPRESENTED THAT IT CANNOT IMMEDIATELY ELIMINATE THE CURRENT INJECTION-TIMING

STRATEGIES AT ISSUE BY RECALIBRATING THE ENGINE COMPUTER SOFTWARE WITHOUT CAUSING SUCH DAMAGE TO

THE ENGINE IN-USE AS TO MAKE THE ENGINE UNMARKETABLE. DDC HAS AGREED TO DEVELOP AND TO USE NEW

TECHNOLOGY TO CHANGE EXISTING ELECTRONIC INJECTION-TIMING STRATEGIES AND MEET THE EMISSION LEVELS

SPECIFIED HEREIN. ACCORDINGLY, THE OBJECTIVES OF THIS CONSENT DECREE ARE (I) TO RESOLVE THE UNITED

STATES’ CLAIMS FOR INJUNCTIVE RELIEF AS DESCRIBED IN SECTIONS VI THROUGH X, AND XVIII THROUGH XIX, AND

PARAGRAPH 116(A), AS FOLLOWS: (A) TO HAVE DDC REDUCE EMISSIONS FROM INTERIM ENGINES AND MEET

SPECIFIED EMISSION LEVELS IN ACCORDANCE WITH THE SCHEDULE SET FORTH HEREIN BY MODIFYING THE CURRENT

INJECTION-TIMING STRATEGIES AND IMPLEMENTING NEW TECHNOLOGY; (B) TO RESOLVE DISPUTED CLAIMS ARISING

UNDER THE ACT AND ENSURE COMPLIANCE WITH THE ACT BY HAVING DDC REPLACE THE STRATEGIES THAT THE

UNITED STATES ALLEGES ARE DEFEAT DEVICES AND PROVIDING FOR EMISSIONS AND COMPLIANCE MONITORING

DURING THE TERM OF THIS DECREE THROUGH SUPPLEMENTARY TEST REQUIREMENTS, AUDITING PROCEDURES, IN-USE

TESTING OF ENGINES, AND REPORTING REQUIREMENTS; (C) TO HAVE DDC REDUCE AMBIENT LEVELS OF AIR

POLLUTANTS BY ACCELERATING IMPLEMENTATION OF MORE STRINGENT ON-ROAD HDDE AND NONROAD CI ENGINE

EMISSION STANDARDS AND OTHER EMISSION REDUCTION PROGRAMS; AND (II) TO RESOLVE THE UNITED STATES’

CLAIMS FOR CIVIL PENALTIES AS DESCRIBED IN PARAGRAPHS 113 AND 137.

VI.REQUIREMENTS FOR ON-ROAD HDDES

A. REQUIREMENTS FOR APPLICATIONS FOR CERTIFICATES OF CONFORMITY

10. IN EACH APPLICATION FOR A CERTIFICATE OF CONFORMITY SUBMITTED BY DDC FOR AN INTERIM

ENGINE FAMILY, DDC SHALL STATE WHETHER THE APPLICATION COVERS LMB ENGINES OR TRUCK HHDDES. IF,

BASED ON REASONABLE EVIDENCE, EPA CONCLUDES THAT THE ENGINES COVERED BY AN APPLICATION FOR TRUCK

HHDDES ARE INTENDED FOR USE AS LMB ENGINES, EPA MAY DENY THE APPLICATION, NOTWITHSTANDING ANY

STATEMENT BY DDC TO THE CONTRARY.

11. COMMENCING WITH APPLICATIONS FOR CERTIFICATES OF CONFORMITY FOR 1999 MODEL YEAR

ENGINES, DDC SHALL COMPLY WITH ALL AECD REPORTING REQUIREMENTS FOUND IN 40 C.F.R. PART 86, SUBPART

A, CONSISTENT WITH EPA’S REGULATIONS AND WRITTEN GUIDANCE OF OCTOBER 1998 OR BY REFERENCE TO

APPENDIX B-1 THROUGH B-4, AS APPLICABLE UNDER THIS CONSENT DECREE, INCLUDING THE REQUIREMENTS TO

IDENTIFY AND PROVIDE A DETAILED DESCRIPTION OF ALL AECDS AND TO PROVIDE A JUSTIFICATION FOR EACH AECD,

CONSISTENT WITH THE APPLICABLE APPENDIX B-1 THROUGH B-4 REQUIREMENTS AND EPA’S GUIDANCE, THAT

RESULTS IN A REDUCTION IN THE EFFECTIVENESS OF THE EMISSION CONTROL SYSTEM.

B. APPLICABILITY OF ADDITIONAL COMPLIANCE REQUIREMENTS

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12. ALL EURO III, NTE, TNTE, AND SMOKE (OR ALTERNATE OPACITY) LIMITS SPECIFIED IN PARAGRAPHS

14, 16, 17, 19 AND 20 SHALL APPLY TO ALL NORMAL VEHICLE OPERATION AND USE. SUBJECT TO THE PROVISIONS OF

THIS PARAGRAPH, DDC SHALL MEET ALL REQUIREMENTS SPECIFIED IN PARAGRAPHS 13 THROUGH 20, AND 23

THROUGH 25, OF THIS CONSENT DECREE THROUGHOUT THE USEFUL LIFE OF THE ENGINE. COMPLIANCE BY AN ENGINE

FAMILY WITH THE NOX PLUS NMHC LIMITS PRIOR TO MODEL YEAR 2004 SHALL NOT SUBJECT THE ENGINE FAMILY TO

THE LONGER USEFUL LIFE REQUIREMENT PROMULGATED BY EPA AND PUBLISHED AT 62 FED. REG. 54694. THE

SPECIFIC USEFUL LIFE REQUIREMENTS APPLICABLE TO ENGINES PRODUCED BEFORE MODEL YEAR 2004 SHALL BE AS

FOLLOWS:

(A) FOR INTERIM ENGINES MANUFACTURED ON OR BEFORE DECEMBER 31, 1999, THE DEFINITION OF USEFUL

LIFE CONTAINED IN 40 C.F.R. PART 86 SHALL APPLY FOR ALL APPLICABLE LIMITS. DDC SHALL APPLY THE

DETERIORATION FACTORS, IF ANY, DEVELOPED FOR THE FTP IN ORDER TO DEMONSTRATE COMPLIANCE WITH THE

EURO III AND NTE STANDARDS. DDC MAY INCREASE THE APPLICABLE EURO III OR NTE DETERIORATION FACTORS

FOR THE ENGINE FAMILY IF, AFTER COMPLETION OF ENGINE TESTING, DETERIORATION FACTORS APPLICABLE TO EURO

III OR NTE LIMITS ARE FOUND TO BE GREATER THAN THE DETERIORATION FACTORS USED TO DETERMINE COMPLIANCE

WITH THE FTP STANDARDS. THE EURO III OR NTE LIMIT FOR SUCH ENGINE FAMILY MAY THEN BE INCREASED BY

THE DIFFERENCE BETWEEN THE FTP FACTOR AND THE APPLICABLE EURO III OR NTE FACTOR FOR THE PURPOSE OF

ANY IN-USE DETERMINATION OF COMPLIANCE. DDC MUST GENERATE AND SUBMIT TO EPA WITH ITS MODEL YEAR

2000 APPLICATIONS FOR CERTIFICATES, DATA SUPPORTING A CHANGE IN THE ORIGINAL DETERIORATION FACTORS, BUT

ALL SUCH DATA MUST BE SUBMITTED PRIOR TO DECEMBER 31, 1999.

(B) FOR AN HDDE MANUFACTURED ON OR AFTER JANUARY 1, 2000, OR WHEN DDC HAS DETERMINED A

SPECIFIC DETERIORATION FACTOR FOR THE EURO III AND NTE LIMITS FOR A PARTICULAR ENGINE FAMILY,

WHICHEVER IS SOONER, THE USEFUL LIFE FOR ALL SUCH LIMITS UNDER THIS CONSENT DECREE SHALL BE THE USEFUL

LIFE SET FORTH IN 40 C.F.R. PART 86 FOR HDDES MANUFACTURED BEFORE MODEL YEAR 2004, WITH NO

ADJUSTMENTS WHEN DETERMINING IN-USE COMPLIANCE.

(C) BEGINNING WITH MODEL YEAR 2004, THE USEFUL LIFE FOR ALL LIMITS UNDER THIS CONSENT DECREE

SHALL BE THE USEFUL LIFE SET FORTH IN 40 C.F.R. PART 86 FOR HDDES MANUFACTURED IN MODEL YEAR 2004

AND LATER.

C. ADDITIONAL REQUIREMENTS APPLICABLE TO LMB ENGINES ONLY

13. SUBJECT TO THE PROVISIONS OF THIS CONSENT DECREE, DDC SHALL NOT EMPLOY A DEFEAT DEVICE IN

ANY ELECTRONICALLY CONTROLLED LMB ENGINE MANUFACTURED ON OR AFTER NOVEMBER 1, 1998.

NOTWITHSTANDING THE FOREGOING SENTENCE, AND WITHOUT EITHER PARTY TO THIS CONSENT DECREE CONCEDING

THAT ANY SUCH STRATEGY IS OR IS NOT A DEFEAT DEVICE, DDC’S LMB ENGINES THAT ARE INTERIM ENGINES MAY

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EMPLOY THE INJECTION-TIMING STRATEGIES AS DESCRIBED AND SPECIFIED IN APPENDIX B-1 AND B-2 TO THIS

CONSENT DECREE, PROVIDED THAT, AT THE TIME OF CERTIFICATION, SUCH ENGINES ARE IN COMPLIANCE WITH ALL

REQUIREMENTS OF PARAGRAPH 14. THESE STRATEGIES ARE USED: (A) FOR ENGINE STARTUP; (B) TO PREVENT ENGINE

OR VEHICLE DAMAGE OR ACCIDENT; (C) TO PROTECT THE ENGINE FROM EXCESSIVE DETERIORATION DURING

SUSTAINED HIGH SPEED OR HIGH LOAD OPERATION; AND/OR (D) TO CONTROL EMISSIONS OF UNBURNED

HYDROCARBONS AT LOW AMBIENT TEMPERATURES.

14. FOR ALL ELECTRONICALLY CONTROLLED LMB ENGINES MANUFACTURED ON OR AFTER NOVEMBER 1,

1998, INCLUDING THE ENGINES SPECIFIED IN PARAGRAPH 13, DDC SHALL COMPLY, EXCEPT AS DESCRIBED AND

SPECIFIED IN APPENDIX B-2, WITH THE FOLLOWING: (A) ALL APPLICABLE FTP STANDARDS WHEN TESTED IN

ACCORDANCE WITH THE FTP FOR HDDES; (B) EURO III COMPOSITE VALUE LIMITS OF 6.0 G/BHP-HR FOR NOX (I.E.,

1.5 TIMES THE APPLICABLE FTP STANDARD FOR NOX), 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER

REGULATED EMISSIONS WHEN TESTED USING THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C OF

THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX; (C) AN NTE LIMIT OF

7.0 G/BHP-HR FOR NOX (I.E., 1.75 TIMES THE APPLICABLE FTP STANDARD FOR NOX) IN ACCORDANCE WITH APPENDIX

C TO THIS CONSENT DECREE; AND (D) EITHER A SMOKE LIMIT OF 1.0 OR A THIRTY SECOND AVERAGE SMOKE OPACITY

OF 4% FOR A 5 INCH PATH LIMIT FOR TRANSIENT TESTING, AND A TEN SECOND AVERAGE SMOKE OPACITY OF 4% FOR A

5 INCH PATH LIMIT FOR STEADY STATE TESTING.

15. EXCEPT AS EXCLUDED IN PARAGRAPH 16, WITHOUT EITHER PARTY TO THIS CONSENT DECREE

CONCEDING THAT ANY SUCH STRATEGY IS OR IS NOT A DEFEAT DEVICE: (A) NO ELECTRONICALLY CONTROLLED LMB

ENGINE MANUFACTURED BY DDC ON OR AFTER JULY 31, 1999, SHALL EMPLOY ANY OF THE INJECTION-TIMING

STRATEGIES DESCRIBED IN APPENDIX B-1, OF THIS CONSENT DECREE, UNLESS EPA DETERMINES THAT THE STRATEGY

IS NOT A DEFEAT DEVICE; BUT (B) DDC’S ELECTRONICALLY CONTROLLED LMB ENGINES MANUFACTURED ON OR

AFTER JULY 31, 1999 AND PRIOR TO OCTOBER 1, 2002 MAY EMPLOY THE STRATEGIES AS DESCRIBED AND SPECIFIED IN

APPENDIX B-2 AND B-3, PROVIDED THAT, AT THE TIME OF CERTIFICATION, SUCH ENGINES ARE IN COMPLIANCE WITH

ALL REQUIREMENTS OF PARAGRAPH 16, AND PROVIDED THAT BEGINNING IN MODEL YEAR 2000, DDC’S LMB

ENGINES MAY EMPLOY SUCH STRATEGIES ONLY IF, AT THE TIME OF CERTIFICATION, THEY COMPLY WITH OR ARE

REVISED TO CONFORM TO THE APPLICABLE LIMITATIONS SET FORTH IN APPENDIX B-4.

16. EXCEPT AS

OTHERWISE EXCLUDED IN THIS PARAGRAPH, ALL ELECTRONICALLY CONTROLLED LMB ENGINES MANUFACTURED ON

OR AFTER JULY 31, 1999, SHALL COMPLY, EXCEPT AS DESCRIBED AND SPECIFIED IN APPENDIX B-2 AND B-3, AND AS

LIMITED BY B-4, WITH THE FOLLOWING: (A) ALL APPLICABLE FTP STANDARDS WHEN TESTED IN ACCORDANCE WITH

THE FTP FOR HDDES; (B) EURO III COMPOSITE VALUE LIMITS OF 4.0 G/BHP-HR FOR NOX (I.E., 1.0 TIMES THE

APPLICABLE FTP STANDARD FOR NOX), 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER REGULATED

EMISSIONS WHEN TESTED USING THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C OF THIS DECREE,

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AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX; (C) AN NTE LIMIT OF 5.0 G/BHP-HR

FOR NOX (I.E., 1.25 TIMES THE APPLICABLE FTP STANDARD FOR NOX) IN ACCORDANCE WITH APPENDIX C TO THIS

CONSENT DECREE; AND (D) EITHER A SMOKE LIMIT OF 1.0 OR A THIRTY SECOND AVERAGE SMOKE OPACITY OF 4% FOR

A 5 INCH PATH LIMIT FOR TRANSIENT TESTING, AND A TEN SECOND AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH

PATH LIMIT FOR STEADY STATE TESTING. EXCLUDED FROM THE FOREGOING REQUIREMENTS OF PARAGRAPHS 15 AND

16 ARE UP TO 2,000 OF DDC’S LMB ENGINES (“EXCLUSION ENGINES”). INSTEAD, PARAGRAPHS 13 AND 14 APPLY TO

SUCH EXCLUSION ENGINES FROM JULY 31, 1999 TO OCTOBER 1, 2002 (INCLUDING THE AUTHORIZATION IN

PARAGRAPH 13 TO EMPLOY THE STRATEGIES SET FORTH IN APPENDIX B-1), PROVIDED THAT, BEGINNING IN MODEL

YEAR 2000, EXCLUSION ENGINES MAY EMPLOY THE STRATEGIES SET FORTH IN APPENDIX B-2 AND B-3 ONLY IF THEY

COMPLY WITH, OR ARE REVISED TO CONFORM TO, THE APPLICABLE LIMITATIONS SET FORTH IN APPENDIX B-4 (OTHER

THAN THE FIRST PARAGRAPH OF APPENDIX B-4 RELATING TO SUSTAINED HIGHWAY OR HIGH LOAD OPERATION, WHICH

IS NOT APPLICABLE TO THE STRATEGIES IN APPENDIX B-2 AND B-3).

17. NO LMB ENGINE MANUFACTURED BY DDC ON OR AFTER OCTOBER 1, 2002, SHALL EMPLOY ANY OF THE

INJECTION-TIMING STRATEGIES DESCRIBED IN APPENDIX B-1, B-2, B-3 AND B-4 TO THIS CONSENT DECREE, UNLESS

EPA DETERMINES THAT THE STRATEGY IS NOT A DEFEAT DEVICE. IN ADDITION, ALL SUCH LMB ENGINES (WHETHER

MECHANICALLY OR ELECTRONICALLY CONTROLLED), SHALL COMPLY WITH THE FOLLOWING: (A) AN FTP LIMIT OF 2.4

G/BHP-HR FOR NOX PLUS NMHC, OR 2.5 G/BHP-HR FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.5 G/BHP-HR;

(B) EURO III COMPOSITE VALUE LIMITS OF 2.4 G/BHP-HR FOR NOX PLUS NMHC, OR 2.5 G/BHP-HR FOR NOX PLUS

NMHC IF NMHCS DO NOT EXCEED 0.5 G/BHP-HR (I.E. 1.0 TIMES THE APPLICABLE NOX PLUS NMHC LIMIT), AND 1.0

TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER APPLICABLE EMISSIONS WHEN TESTED USING THE EURO III

TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C TO THIS CONSENT DECREE; (C) ALL ASSOCIATED EMISSIONS

SURFACE LIMITS SPECIFIED IN APPENDIX C; (D) AN NTE LIMIT OF 3.0 G/BHP-HR FOR NOX PLUS NMHC, OR 3.125

G/BHP-HR FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.6250 G/BHP-HR (I.E., 1.25 TIMES THE APPLICABLE

NOX PLUS NMHC LIMIT), IN ACCORDANCE WITH APPENDIX C OF THIS DECREE; (E) AN NTE LIMIT OF 0.1250 G/BHP­

HR FOR PM (I.E., 1.25 TIMES THE APPLICABLE FTP STANDARD FOR PM), EXCEPT THE APPLICABLE NTE LIMIT FOR PM

FOR URBAN BUS ENGINES SHALL BE 0.06250 G/BHP-HR AND 0.08750 G/BHP-HR FOR IN-USE TESTING PURPOSES, IN

ACCORDANCE WITH APPENDIX C OF THIS DECREE; AND (F) EITHER A SMOKE LIMIT OF 1.0 OR A THIRTY SECOND

AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR TRANSIENT TESTING, AND A TEN SECOND AVERAGE

SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR STEADY STATE TESTING.

D. ADDITIONAL REQUIREMENTS APPLICABLE TO TRUCK HHDDES ONLY

18. SUBJECT TO THE PROVISIONS OF THIS CONSENT DECREE, DDC SHALL NOT EMPLOY A DEFEAT DEVICE IN

ANY ELECTRONICALLY CONTROLLED TRUCK HHDDE MANUFACTURED ON OR AFTER DECEMBER 31, 1998.

NOTWITHSTANDING THE FOREGOING SENTENCE, AND WITHOUT EITHER PARTY TO THIS CONSENT DECREE CONCEDING

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THAT ANY SUCH STRATEGY IS OR IS NOT A DEFEAT DEVICE, DDC’S TRUCK HHDDES THAT ARE INTERIM ENGINES

MAY EMPLOY THOSE INJECTION-TIMING STRATEGIES AS DESCRIBED AND SPECIFIED IN APPENDIX B-1, B-2 AND B-3 TO

THIS CONSENT DECREE, PROVIDED THAT, AT THE TIME OF CERTIFICATION, SUCH ENGINES ARE IN COMPLIANCE WITH

ALL REQUIREMENTS OF PARAGRAPH 19, AND PROVIDED THAT BEGINNING IN MODEL YEAR 2000, DDC’S TRUCK

HHDDES MAY EMPLOY THE STRATEGIES AS DESCRIBED AND SPECIFIED IN APPENDIX B-1, B-2 AND B-3 ONLY IF, AT

THE TIME OF CERTIFICATION, THEY COMPLY WITH, OR ARE REVISED TO CONFORM TO, THE APPLICABLE LIMITATIONS

SET FORTH IN APPENDIX B-4. THESE STRATEGIES ARE USED: (A) FOR ENGINE STARTUP; (B) TO PREVENT ENGINE OR

VEHICLE DAMAGE OR ACCIDENT; (C) TO PROTECT THE ENGINE FROM EXCESSIVE DETERIORATION DURING SUSTAINED

HIGH-SPEED OR HIGH LOAD OPERATION; AND/OR (D) TO CONTROL EMISSIONS OF UNBURNED HYDROCARBONS AT LOW

AMBIENT TEMPERATURES.

19. IN ADDITION, ALL ELECTRONICALLY CONTROLLED TRUCK HHDDES MANUFACTURED ON OR AFTER

DECEMBER 31, 1998, INCLUDING ENGINES SPECIFIED IN PARAGRAPH 18, SHALL COMPLY, EXCEPT AS DESCRIBED AND

SPECIFIED IN APPENDIX B-2 AND B-3, AND AS LIMITED BY B-4, WITH THE FOLLOWING: (A) ALL APPLICABLE FTP

STANDARDS WHEN TESTED IN ACCORDANCE WITH THE FTP FOR HDDES; (B) EURO III COMPOSITE VALUE LIMITS OF

6.0 G/BHP-HR FOR NOX (I.E., 1.5 TIMES THE APPLICABLE FTP STANDARD FOR NOX), 1.0 TIMES THE APPLICABLE FTP

STANDARD FOR ALL OTHER REGULATED EMISSIONS WHEN TESTED USING THE EURO III TEST PROTOCOL IN

ACCORDANCE WITH APPENDIX C OF THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN

THAT APPENDIX; (C) AN NTE LIMIT OF 7.0 G/BHP-HR FOR NOX (I.E., 1.75 TIMES THE APPLICABLE FTP STANDARD FOR

NOX) IN ACCORDANCE WITH APPENDIX C TO THIS CONSENT DECREE; AND (D) EITHER A SMOKE LIMIT OF 1.0 OR A

THIRTY SECOND AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR TRANSIENT TESTING, AND A TEN

SECOND AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR STEADY STATE TESTING.

20. NO TRUCK HHDDE MANUFACTURED BY DDC ON OR AFTER OCTOBER 1, 2002, SHALL EMPLOY ANY OF

THE INJECTION-TIMING STRATEGIES DESCRIBED IN APPENDIX B-1, B-2, B-3 AND B-4 TO THIS CONSENT DECREE,

UNLESS EPA DETERMINES THAT THE STRATEGY IS NOT A DEFEAT DEVICE. IN ADDITION, ALL TRUCK HHDDES

(WHETHER MECHANICALLY OR ELECTRONICALLY CONTROLLED) MANUFACTURED ON OR AFTER OCTOBER 1, 2002,

SHALL COMPLY WITH THE FOLLOWING: (A) AN FTP LIMIT OF 2.4 G/BHP-HR FOR NOX PLUS NMHC, OR 2.5 G/BHP-HR

FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.5 G/BHP-HR; (B) EURO III COMPOSITE VALUE LIMITS OF 2.4

G/BHP-HR FOR NOX PLUS NMHC, OR 2.5 G/BHP-HR FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.5 G/BHP-HR

(I.E., 1.0 TIMES THE APPLICABLE NOX PLUS NMHC LIMIT), AND 1.0 TIMES ALL OTHER APPLICABLE REGULATED

EMISSIONS WHEN TESTED USING THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C OF THIS DECREE;

(C) ALL ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN APPENDIX C; AND (D) AN NTE LIMIT OF 3.0 G/BHP-HR

FOR NOX PLUS NMHC, OR 3.125 G/BHP-HR FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.625 G/BHP-HR (I.E.,

1.25 TIMES THE APPLICABLE NOX PLUS NMHC LIMIT), IN ACCORDANCE WITH APPENDIX C OF THIS DECREE; (E) AN

NTE LIMIT OF 0.125 G/BHP-HR FOR PM (I.E., 1.25 TIMES THE APPLICABLE FTP STANDARD FOR PM); AND (F) EITHER A

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SMOKE LIMIT OF 1.0 OR A THIRTY SECOND AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR TRANSIENT

TESTING, AND A TEN SECOND AVERAGE SMOKE OPACITY OF 4% FOR A 5 INCH PATH LIMIT FOR STEADY STATE TESTING.

E. AVERAGING, BANKING AND TRADING

21. DDC SHALL HAVE ZERO NOX CREDITS FOR HHDDES AND ZERO NOX CREDITS FOR MHDDES FROM ITS

A,B&T ACCOUNT AT THE END OF MODEL YEAR 1997 FOR USE DURING THE 1998 AND 1999 MODEL YEARS. ALL

OTHER NOX CREDITS IN DDC’S A,B&T ACCOUNT AT THE END OF MODEL YEAR 1997 SHALL BE DEEMED VOID, AND

DDC SHALL NOT TRADE SUCH CREDITS OR USE THEM TO OFFSET EMISSIONS AT ANY TIME IN THE FUTURE. IN

ADDITION, ANY OF THE AVAILABLE CREDITS IDENTIFIED ABOVE THAT ARE NOT USED BY THE END OF MODEL YEAR

1999 SHALL EXPIRE, AND DDC SHALL NOT TRADE SUCH CREDITS TO OFFSET EMISSIONS AT ANY TIME AFTER MODEL

YEAR 1999. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPH 23, THE USE OF NOX CREDITS AVAILABLE UNDER

THIS PARAGRAPH BY AN ENGINE FAMILY SHALL NOT HAVE ANY EFFECT ON THE APPLICABLE NON-FTP LIMITS UNDER

THIS CONSENT DECREE THAT MUST BE MET BY THAT ENGINE FAMILY.

22. EXCEPT AS SPECIFIED IN PARAGRAPHS 21 THROUGH 23, THE APPLICABLE A,B&T REGULATIONS SHALL

APPLY ONLY TO THE FTP STANDARDS OF THIS CONSENT DECREE.

(A) FOR PURPOSES OF

AVERAGING AND GENERATING CREDITS, THE FAMILY EMISSIONS LIMIT (“FEL”) OF THE ENGINE FAMILY SHALL BE

COMPARED TO THE FTP LIMIT APPLICABLE UNDER THIS CONSENT DECREE.

(B) THE A,B&T

REGULATIONS APPLICABLE TO MODEL YEAR 2004 AND LATER ENGINES SHALL APPLY TO ALL ENGINES CERTIFIED TO

THE NOX PLUS NMHC LIMITS.

(C) CREDITS GENERATED

FROM ENGINES NOT CERTIFIED TO THE NOX PLUS NMHC LIMITS MAY BE USED IN A,B&T FOR ENGINES NOT CERTIFIED

TO THE NOX PLUS NMHC LIMITS. CREDITS GENERATED FROM ENGINES NOT CERTIFIED TO THE NOX PLUS NMHC

LIMITS MAY BE USED IN A,B&T FOR ENGINES CERTIFIED TO THE NOX PLUS NMHC LIMITS, BUT ONLY FOR ENGINES

MANUFACTURED ON OR AFTER JANUARY 1, 2003, AND ONLY IF THE CREDIT-GENERATING ENGINES ARE ALSO CERTIFIED

TO A EURO III COMPOSITE VALUE LIMIT EQUAL TO OR LESS THAN 1.0 TIMES THE NOX FEL FOR SUCH ENGINES.

(D) AN HDDE

MANUFACTURED AFTER OCTOBER 1, 2002, AND BEFORE JANUARY 1, 2003 MAY BE CERTIFIED TO THE 4.0 G/BHP-HR

NOX FTP STANDARD ONLY IF THE MANUFACTURER HAS PREVIOUSLY GENERATED ENOUGH ENGINE-CREDITS WITHIN

THE SAME CLASS OF ENGINES (I.E., HHDDE, MHDDE, AND LHDDE) TO OFFSET THE ENGINE-CREDIT USED BY THE

ENGINE. ANY SUCH ENGINE MANUFACTURED PRIOR TO OCTOBER 1, 2002, AND CERTIFIED TO THE NOX PLUS NMHC

LIMIT, WITH AN FEL LESS THAN OR EQUAL TO THE NOX PLUS NMHC LIMIT SHALL GENERATE ONE ENGINE-CREDIT.

ANY SUCH ENGINE MANUFACTURED AFTER OCTOBER 1, 2002, CERTIFIED TO THE 4.0 G/BHP-HR NOX FTP STANDARD

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SHALL USE ONE ENGINE-CREDIT. IN ADDITION, AN ENGINE-CREDIT MAY ONLY BE USED FOR AN OFFSET UNDER THIS

SUBPARAGRAPH IF THE ENGINE GENERATING THE CREDIT WAS MANUFACTURED AT LEAST AS MANY DAYS BEFORE

OCTOBER 1, 2002, AS THE ENGINE USING THE CREDIT WAS MANUFACTURED AFTER OCTOBER 1, 2002.

(E) A NONROAD CI

ENGINE COVERED BY PARAGRAPH 60 OF THIS CONSENT DECREE AND MANUFACTURED AFTER JANUARY 1, 2005, AND

BEFORE JULY 1, 2005, MAY BE CERTIFIED TO THE EMISSION LIMITS THAT WOULD OTHERWISE APPLY TO THE ENGINE

PRIOR TO JANUARY 1, 2005 ONLY IF THE MANUFACTURER HAS PREVIOUSLY GENERATED ENOUGH ENGINE-CREDITS

WITHIN THE SAME A,B&T CLASS OF ENGINES TO OFFSET THE ENGINE-CREDIT USED BY THE ENGINE. ANY SUCH ENGINE

MANUFACTURED PRIOR TO JANUARY 1, 2005, AND CERTIFIED TO THE EMISSION LIMITS APPLICABLE UNDER

PARAGRAPH 60, WITH A FEL LESS THAN OR EQUAL TO SUCH EMISSION LIMITS, SHALL GENERATE ONE ENGINE-CREDIT.

ANY SUCH ENGINE MANUFACTURED AFTER JANUARY 1, 2005, CERTIFIED TO THE EMISSION LIMITS APPLICABLE UNDER

PARAGRAPH 60 SHALL USE ONE ENGINE-CREDIT. IN ADDITION, AN ENGINE-CREDIT MAY ONLY BE USED FOR AN OFFSET

UNDER THIS SUBPARAGRAPH IF THE ENGINE GENERATING THE CREDIT WAS MANUFACTURED AT LEAST AS MANY DAYS

BEFORE JANUARY 1, 2005, AS THE ENGINE USING THE CREDIT WAS MANUFACTURED AFTER JANUARY 1, 2005.

23. EXCEPT AS SPECIFIED IN PARAGRAPH 21 OF THIS CONSENT DECREE, IF DDC DECLARES A NOX, NOX

PLUS NMHC, OR PM FEL, OR ESTABLISHES A COMPLIANCE LEVEL ("CL") PURSUANT TO 40 C.F.R. PART 86 SUBPART

L, FOR AN ENGINE FAMILY, THEN THE APPLICABLE EURO III, NTE, AND TNTE LIMITS SHALL BE AS FOLLOWS:

(A) THE EURO III

COMPOSITE VALUE LIMITS FOR NOX AND PM SHALL BE THE APPLICABLE MULTIPLIER TIMES THE NOX AND PM FEL

OR CL. THE EURO III COMPOSITE VALUE LIMITS FOR NOX PLUS NMHC SHALL BE THE NOX PLUS NMHC FEL;

(B) THE NTE LIMITS

SHALL BE THE APPLICABLE MULTIPLIER TIMES THE NOX, PM, AND NOX PLUS NMHC FELS OR CLS; AND

(C) THE TNTE LIMITS

SHALL BE 1.7 TIMES THE PM FEL AND 1.3 TIMES THE NOX PLUS NMHC FEL OR CL, UNLESS MODIFIED IN

ACCORDANCE WITH PARAGRAPH 25.

F. TNTE LIMITS

24. ON OR AFTER OCTOBER 1, 2002, ALL HDDES MANUFACTURED BY DDC SHALL MEET THE TNTE LIMITS

SET FORTH BELOW, OR THE ALTERNATE LIMITS ESTABLISHED PURSUANT TO PARAGRAPH 25, WHEN TESTED IN

ACCORDANCE WITH THE TNTE TEST PROTOCOL SPECIFIED IN APPENDIX C TO THIS CONSENT DECREE. SUBJECT TO

THE PROVISIONS OF PARAGRAPH 25 OF THIS CONSENT DECREE, THE TNTE LIMIT FOR NOX PLUS NMHC SHALL BE

3.12 G/BHP-HR FOR NOX PLUS NMHC, OR 3.25 G/BHP-HR FOR NOX PLUS NMHC IF NMHCS DO NOT EXCEED 0.65

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G/BHP-HR. THE TNTE LIMIT FOR PM SHALL BE 0.08 G/BHP-HR FOR URBAN BUS ENGINES (0.12 G/BHP-HR FOR IN-USE

TESTING PURPOSES) AND 0.17 G/BHP-HR FOR ALL OTHER HEAVY-DUTY DIESEL ENGINES.

25. PRIOR TO OCTOBER 1, 2000, EPA AND DDC SHALL REVIEW ALL TNTE TEST DATA SUBMITTED TO THE

AGENCY BY DDC PURSUANT TO PARAGRAPH 26(B) OF THIS CONSENT DECREE, AND INFORMATION ON CURRENT AND

ANTICIPATED TECHNOLOGIES, TO DETERMINE WHETHER THE ABOVE TNTE LIMITS SHOULD BE MODIFIED TO ENSURE

THAT THE TNTE LIMITS ARE THE LOWEST ACHIEVABLE GIVEN THE TECHNOLOGY AVAILABLE AT THAT TIME. THE

PARTIES AGREE THAT THE SAME TNTE LIMITS SHOULD APPLY TO ALL SETTLING HDDE MANUFACTURERS, AND

DELIBERATIONS REGARDING THE APPROPRIATE TNTE LIMITS SHOULD THEREFORE BE AMONG EPA (AFTER

CONSULTATION WITH CARB) AND ALL SETTLING HDDE MANUFACTURERS. IF EPA AND DDC DETERMINE THAT

DIFFERENT TNTE LIMITS ARE APPROPRIATE, OR A DIFFERENT COMPLIANCE DATE IS APPROPRIATE, THE PARTIES SHALL

JOINTLY PETITION THE COURT TO MODIFY THE CONSENT DECREE. IF EPA AND DDC DISAGREE ON THE

APPROPRIATENESS OF THE TNTE LIMITS OR THE COMPLIANCE DATE, THE MATTER SHALL BE RESOLVED THROUGH THE

DISPUTE RESOLUTION PROCEDURES IN SECTION XVI OF THIS CONSENT DECREE, EXCEPT: (A) ANY FINAL TNTE LIMITS

DETERMINED THROUGH MUTUAL CONSENT OF THE PARTIES SHALL BE AGREED UPON ONLY AFTER CONSULTATION

WITH, AND THE AGREEMENT OF, ALL SETTLING HDDE MANUFACTURERS; AND (B) THE PARTIES HEREBY CONSENT TO

THE CONSOLIDATION OF ANY JUDICIAL DISPUTE RESOLUTION PROCEEDINGS UNDER THIS CONSENT DECREE WITH

RESPECT TO THE FINAL TNTE LIMITS WITH DISPUTE RESOLUTION PROCEEDINGS REGARDING THE SAME ISSUE UNDER A

CONSENT DECREE WITH ANY OTHER SETTLING HDDE MANUFACTURER, AND TO INTERVENTION OF ANY SETTLING

HDDE MANUFACTURER IN JUDICIAL DISPUTE RESOLUTION REGARDING THIS ISSUE. SHOULD ANY SETTLING HDDE

MANUFACTURER SEEK JUDICIAL DISPUTE RESOLUTION REGARDING THE FINAL TNTE LIMITS, DDC AGREES TO BE

BOUND BY THE FINAL TNTE LIMITS DETERMINED BY THE COURT IN SUCH PROCEEDING, EVEN IF DDC HAS NOT

SOUGHT JUDICIAL DISPUTE RESOLUTION REGARDING THIS ISSUE.

VI-A. REQUIREMENTS FOR NONROAD CI ENGINES

25A. SUBJECT TO

THE PROVISIONS OF THIS CONSENT DECREE, DDC SHALL NOT EMPLOY A DEFEAT DEVICE IN ANY ELECTRONICALLY

CONTROLLED NONROAD CI ENGINE MANUFACTURED ON OR AFTER LODGING OF THIS CONSENT DECREE.

NOTWITHSTANDING THE FOREGOING SENTENCE, WITHOUT EITHER PARTY TO THIS CONSENT DECREE CONCEDING THAT

ANY SUCH STRATEGY IS OR IS NOT A DEFEAT DEVICE, NONROAD CI ENGINES MANUFACTURED BY DDC PRIOR TO

JANUARY 1, 2000 MAY EMPLOY THE INJECTION-TIMING STRATEGIES AS SPECIFICALLY DESCRIBED IN APPENDIX F-1

AND F-2 TO THIS CONSENT DECREE. NO ELECTRONICALLY CONTROLLED NONROAD CI ENGINE MANUFACTURED BY

DDC ON OR AFTER JANUARY 1, 2000 SHALL EMPLOY THE INJECTION TIMING STRATEGY DESCRIBED IN APPENDIX F-1

TO THIS CONSENT DECREE. NONROAD CI ENGINES MANUFACTURED BY DDC ON OR AFTER JANUARY 1, 2000 MAY

EMPLOY THE STRATEGIES DESCRIBED IN APPENDIX F-2 TO THIS CONSENT DECREE, ONLY IF THEY COMPLY WITH, OR

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ARE REVISED TO CONFORM TO, THE APPLICABLE LIMITATIONS SET FORTH IN APPENDIX F-3. NO NONROAD CI ENGINE

MANUFACTURED BY DDC ON OR AFTER JANUARY 1, 2005, SHALL EMPLOY ANY OF THE INJECTION TIMING STRATEGIES

DESCRIBED IN APPENDIX F TO THIS CONSENT DECREE, UNLESS EPA DETERMINES THAT THE STRATEGY IS NOT A

DEFEAT DEVICE.

25B. COMMENCING

WITH APPLICATIONS FOR CERTIFICATES OF CONFORMITY FOR 1999 MODEL YEAR NONROAD CI ENGINES, DDC SHALL

COMPLY WITH ALL APPLICABLE AECD REPORTING REQUIREMENTS FOUND IN 40 C.F.R. PART 89, CONSISTENT WITH

EPA’S REGULATIONS AND WRITTEN GUIDANCE OF OCTOBER 1998 OR BY REFERENCE TO APPENDIX F, INCLUDING THE

REQUIREMENTS TO IDENTIFY AND PROVIDE A DETAILED DESCRIPTION OF ALL AECDS AND TO PROVIDE A

JUSTIFICATION FOR EACH AECD, CONSISTENT WITH APPENDIX F AND EPA’S GUIDANCE, THAT RESULTS IN A

REDUCTION IN THE EFFECTIVENESS OF THE EMISSION CONTROL SYSTEM.

VII.FEDERAL CERTIFICATION, SELECTIVE ENFORCEMENT AUDITING,

ADMINISTRATIVE RECALL, AND RECORD KEEPING AND REPORTING

REQUIREMENTS ASSOCIATED WITH THE EURO III, NTE, TNTE, SMOKE (OR

ALTERNATE OPACITY) AND NOX PLUS NMHC LIMITS

26. WITH RESPECT TO THE EURO III, NTE, TNTE, SMOKE (OR ALTERNATE OPACITY) LIMITS, AND NOX

PLUS NMHC LIMIT, DDC SHALL BE SUBJECT TO AND COMPLY WITH ALL REQUIREMENTS OF EPA’S REGULATIONS AND

THE ACT, AND SHALL BE ENTITLED TO INVOKE THE ADMINISTRATIVE PROCEDURES OF EPA’S REGULATIONS AND THE

ACT, THAT WOULD BE APPLICABLE IF THOSE LIMITS WERE EMISSION STANDARDS AND PROCEDURES ADOPTED UNDER

SECTIONS 202(A)(3) AND 206 OF THE ACT, 42 U.S.C. §§ 7521(A)(3) AND 7525, INCLUDING THE REQUIREMENTS AND

PROCEDURES RELATING TO CERTIFICATION, WARRANTY, SELECTIVE ENFORCEMENT AUDITING UNDER SECTION 206(B)

OF THE ACT, 42 U.S.C. § 7525(B), ADMINISTRATIVE RECALL UNDER SECTION 207(C) OF THE ACT, 42 U.S.C.

§ 7541(C), AND RECORD KEEPING AND REPORTING REQUIREMENTS, SUBJECT TO THE FOLLOWING:

(A) DDC SHALL COMPLY

WITH ALL RECORD KEEPING AND REPORTING REQUIREMENTS ASSOCIATED WITH CERTIFICATION TESTING DONE TO

DEMONSTRATE COMPLIANCE WITH THE EURO III COMPOSITE VALUE LIMIT AND THE NOX PLUS NMHC LIMIT FOUND

IN PARAGRAPH 14, 16, 17, 19, 20, AND 23 OF THIS DECREE, BUT NEED ONLY SUBMIT THE COMPLIANCE STATEMENTS

REQUIRED IN APPENDIX C OF THIS DECREE TO DEMONSTRATE COMPLIANCE WITH ALL OTHER EURO III, NTE, TNTE,

AND SMOKE (OR THE ALTERNATE OPACITY) LIMITS. DDC SHALL KEEP AND PROVIDE TO THE UNITED STATES, WITHIN

30 DAYS OF A REQUEST, ALL EMISSION TEST RESULTS, ENGINEERING ANALYSIS, AND ANY OTHER INFORMATION WHICH

FORMED THE BASIS FOR MAKING SUCH COMPLIANCE STATEMENTS;

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(B) BEGINNING WITH THE

1999 MODEL YEAR, DDC SHALL SUBMIT TNTE TEST RESULTS CONDUCTED IN ACCORDANCE WITH APPENDIX C OF

THIS DECREE FOR ALL OF ITS CERTIFICATION ENGINES AS PART OF ITS CERTIFICATE APPLICATIONS. FOR APPLICATIONS

SUBMITTED PRIOR TO MARCH 1, 1999, SUBMISSION OF TNTE TEST RESULTS MAY BE DELAYED UNTIL MARCH 1, 1999.

TNTE TEST RESULTS SHALL INCLUDE THE FOLLOWING SPEEDS: THE LOWEST SPEED IN THE NOT TO EXCEED CONTROL

AREA (“ESC”), THE 15% ESC SPEED, THE 25% ESC SPEED (SPEED A), THE 50% ESC SPEED (SPEED B), THE 75%

ESC SPEED (SPEED C), AND THE 100% ESC SPEED (SPEED D);

(C) ANY DISPUTE ARISING

UNDER OR RELATING TO THE PARTIES’ OBLIGATIONS UNDER THIS CONSENT DECREE REGARDING THE EURO III, NTE,

TNTE, AND SMOKE (OR ALTERNATE OPACITY) LIMITS SHALL NOT BE SUBJECT TO THE PROVISIONS OF SECTION 307 OF

THE ACT, 42 U.S.C. §7607, BUT INSTEAD SHALL BUT BE RESOLVED THROUGH THE DISPUTE RESOLUTION PROCEDURES

IN SECTION XVI OF THIS CONSENT DECREE;

(D) SECTION 304 OF THE

ACT, 42 U.S.C. § 7604, SHALL NOT APPLY TO COMPLIANCE WITH THE EURO III, NTE, TNTE, SMOKE (OR THE

ALTERNATE OPACITY), OR THE NOX PLUS NMHC LIMITS;

(E) FOR ANY HEARING REGARDING COMPLIANCE WITH THE EURO III, NTE, TNTE, SMOKE (OR

ALTERNATE OPACITY), OR THE NOX PLUS NMHC LIMITS, AT WHICH, IF THEY WERE STANDARDS

UNDER EXISTING REGULATIONS, AN ADMINISTRATIVE LAW JUDGE WOULD OTHERWISE PRESIDE, EPA

SHALL APPOINT A HEARING OFFICER WHO SHALL PRESIDE AT SUCH HEARING; AND

(F) ANY SEA TESTING OF ENGINES FOR CONFORMANCE WITH EURO III, NTE, OR TNTE LIMITS SHALL

BE CONDUCTED CONSISTENT WITH WRITTEN EPA GUIDANCE.

27. EXCEPT AS PROVIDED IN PARAGRAPH 26, EPA MAY EXERCISE ANY AUTHORITY UNDER ITS REGULATIONS

OR THE ACT, INCLUDING CERTIFICATION, WARRANTY, SELECTIVE ENFORCEMENT AUDITING UNDER SECTION 206(B) OF

THE ACT, 42 U.S.C. § 7525(B), ADMINISTRATIVE

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RECALL UNDER SECTION 207(C) OF THE ACT, 42 U.S.C. § 7541(C), AND TAKING ENFORCEMENT ACTIONS

UNDER SECTIONS 204 AND 205 OF THE ACT, 42 U.S.C. §§ 7523 AND 7524, THAT WOULD BE APPLICABLE IF THE EURO

III, NTE, TNTE, SMOKE (OR THE ALTERNATE OPACITY), AND THE NOX PLUS NMHC LIMITS WERE EMISSIONS

STANDARDS AND PROCEDURES ADOPTED UNDER SECTIONS 202(A)(3) AND 206 OF THE ACT, 42 U.S.C. §§ 7521(A)(3)

AND 7525.

28. FOR LMB ENGINES AND TRUCK HHDDES THAT ARE INTERIM ENGINES, EPA AGREES NOT TO DENY,

SUSPEND, WITHDRAW, OR REVOKE A CERTIFICATE OF CONFORMITY UNDER THE TERMS OF 40 C.F.R. PART 86 ON THE

GROUNDS THAT AN ENGINE OR ENGINES CONTAIN ONE OR MORE OF THE STRATEGIES SPECIFICALLY DESCRIBED IN THE

APPLICABLE PORTIONS OF APPENDIX B-1 THROUGH B-4.

28A. FOR NONROAD CI ENGINES MANUFACTURED PRIOR TO JANUARY 1, 2005, EPA AGREES NOT TO DENY,

SUSPEND, WITHDRAW, OR REVOKE A CERTIFICATE OF CONFORMITY UNDER THE TERMS OF 40 C.F.R. PART 89 ON THE

GROUNDS THAT AN ENGINE OR ENGINES CONTAIN ONE OR MORE OF THE STRATEGIES SPECIFICALLY DESCRIBED IN

APPENDIX F-1 AND F-2 TO THIS CONSENT DECREE, AS LIMITED BY APPENDIX F-3 BEGINNING IN MODEL YEAR 2000.

29. BEGINNING WITH MODEL YEAR 1999, WITH RESPECT TO ANY EURO III, NTE, TNTE, SMOKE (OR

THE ALTERNATE OPACITY), OR NOX PLUS NMHC LIMIT THAT BECOMES MORE STRINGENT BEFORE THE END OF A

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MODEL YEAR, ANY CERTIFICATE OF CONFORMITY FOR THAT MODEL YEAR ISSUED PRIOR TO THE DATE THE

LIMITS CHANGE SHALL COVER ONLY THOSE ENGINES MANUFACTURED BEFORE THE DATE THE LIMITS BECOME MORE

STRINGENT. BEGINNING WITH MODEL YEAR 1999, DDC SHALL APPLY FOR A NEW CERTIFICATE TO COVER ANY

ENGINE IT INTENDS TO MANUFACTURE AND SELL, OR OFFER FOR SALE, FOR THE REST OF THE MODEL YEAR BY

SUBMITTING INFORMATION SUFFICIENT TO SHOW THAT THE ENGINES WILL COMPLY WITH THE MORE STRINGENT LIMITS.

DDC SHALL HAVE THE OPTION OF SATISFYING THE REQUIREMENTS OF THIS PARAGRAPH BY DESIGNATING ENGINES AS

THE FOLLOWING MODEL YEAR.

30. EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THIS DECREE DOES NOT MODIFY, CHANGE, OR LIMIT IN ANY

WAY THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THE ACT AND EPA’S REGULATIONS WITH RESPECT TO THE

CONTROL OF EMISSIONS FROM HDDES.

VIII. COMPLIANCE AUDITING AND IN-USE TESTING

A. COMPLIANCE AUDITOR

31. WITHIN 120 DAYS OF THE ENTRY OF THIS DECREE, DDC SHALL DESIGNATE AND PROVIDE TO THE UNITED

STATES, SUBJECT TO THE UNITED STATES’ DISAPPROVAL, THE NAME, CURRENT EMPLOYMENT POSITION, AND

QUALIFICATIONS OF A COMPLIANCE AUDITOR RESPONSIBLE FOR AUDITING DDC’S PROGRESS IN MEETING THE

REQUIREMENTS OF THIS DECREE. THE COMPLIANCE AUDITOR PROPOSED BY DDC SHALL BE DEEMED APPROVED BY

THE UNITED STATES UNLESS DISAPPROVED WITHIN 30 DAYS OF THE DATE WHEN THE INFORMATION DESCRIBED IN THE

PRECEDING SENTENCE IS PROVIDED BY DDC. SHOULD THE UNITED STATES DISAPPROVE A PROPOSED COMPLIANCE

AUDITOR, DDC SHALL DESIGNATE AND PROVIDE TO THE UNITED STATES THE NAME, CURRENT POSITION, AND

QUALIFICATIONS OF AN ALTERNATIVE COMPLIANCE AUDITOR WITHIN 20 DAYS OF THE NOTICE OF DISAPPROVAL. ANY

DISPUTE REGARDING THE UNITED STATES’ DISAPPROVAL OF ANY PROPOSED COMPLIANCE AUDITOR SHALL BE

RESOLVED THROUGH THE DISPUTE RESOLUTION PROCEDURES OF SECTION XVI OF THIS CONSENT DECREE. ANY

SUCCESSOR TO THE COMPLIANCE AUDITOR MUST ALSO BE APPROVED IN ACCORDANCE WITH THE PROCEDURE SET

FORTH IN THIS PARAGRAPH.

32. THE COMPLIANCE AUDITOR: (A) SHALL BE AN EMPLOYEE OF DDC; (B) SHALL HAVE NOT LESS THAN TEN

YEARS OF PRACTICAL EXPERIENCE IN DIESEL ENGINE DESIGN AND/OR MANUFACTURING; (C) SHALL NOT HAVE ANY

DIRECT RESPONSIBILITY FOR DDC’S DEVELOPMENT OF ENGINES OR TECHNOLOGY TO COMPLY WITH THE

REQUIREMENTS OF THIS CONSENT DECREE; (D) SHALL NOT REPORT TO OR BE SUPERVISED BY ANYONE BELOW THE

LEVEL OF THE CHIEF EXECUTIVE OFFICER (“CEO”) HAVING ANY RESPONSIBILITY FOR DDC’S DEVELOPMENT OF

ENGINES OR TECHNOLOGY TO COMPLY WITH THE REQUIREMENTS OF THIS CONSENT DECREE; AND (E) SHALL SPEND A

MINIMUM OF 500 HOURS PER YEAR THROUGH COMPLIANCE WITH THE CERTIFICATION REQUIREMENTS OF PARAGRAPHS

- 17 ­

17 AND 20, AT WHICH TIME THE MINIMUM HOURS SHALL BE REDUCED TO 100 HOURS PER YEAR, FULFILLING THE

DUTIES DESCRIBED HEREIN. IN ADDITION, WITH RESPECT TO THE PERFORMANCE OF THE COMPLIANCE AUDITING

REQUIREMENTS OF THIS CONSENT DECREE, THE COMPLIANCE AUDITOR SHALL REPORT DIRECTLY TO THE CEO FOR

THE PURPOSE OF CARRYING OUT THE PROVISIONS OF THIS SECTION, AND SHALL PROVIDE COPIES OF ALL REPORTS

REQUIRED BY THIS SECTION DIRECTLY TO THE CEO. THE COMPLIANCE AUDITOR SHALL EXECUTE HIS OR HER

RESPONSIBILITIES UNDER THIS CONSENT DECREE IN A MANNER CONSISTENT WITH THE RELEVANT PROVISIONS OF THE

INSTITUTE OF INTERNAL AUDITORS’ CODIFICATION OF STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL

AUDITING.

33. DDC’S COMPLIANCE AUDITOR SHALL BE RESPONSIBLE FOR AUDITING DDC’S PROGRESS IN DEVELOPING

AND IMPLEMENTING THE TECHNOLOGY NEEDED TO MEET THE EURO III, NTE, TNTE, SMOKE (OR ALTERNATE

OPACITY), AND THE NOX PLUS NMHC LIMITS. THE COMPLIANCE AUDITOR SHALL ALSO BE RESPONSIBLE FOR

AUDITING DDC’S PROGRESS IN DEVELOPING AND IMPLEMENTING TECHNOLOGY NEEDED TO MEET THE LOW NOX

REBUILD AND NONROAD CI ENGINE STANDARD PULL-AHEAD REQUIREMENTS SPECIFIED IN PARAGRAPHS 60 AND 64 OF

THIS DECREE.

34. DDC SHALL MAKE AVAILABLE TO THE COMPLIANCE AUDITOR ALL OF DDC’S RECORDS, EXCEPT FOR

PRIVILEGED ATTORNEY-CLIENT COMMUNICATIONS, AND ALL RECORDS OF ANY CONTRACTOR UTILIZED BY DDC TO

ASSIST IN THE DEVELOPMENT AND IMPLEMENTATION OF TECHNOLOGY NEEDED TO MEET THE REQUIREMENTS SPECIFIED

IN THIS DECREE. THESE RECORDS SHALL INCLUDE, BUT NOT BE LIMITED TO, RECORDS PERTAINING OR RELATING TO

DECISIONS TO PURSUE OR TO ABANDON POTENTIALLY AVAILABLE TECHNOLOGIES OR STRATEGIES, AND THE LEVEL OF

FUNDING REQUESTED, BUDGETED, OR PROVIDED, TO ACHIEVE COMPLIANCE WITH THIS CONSENT DECREE. DDC SHALL

PROVIDE THE COMPLIANCE AUDITOR WITH ACCESS TO ANY FACILITY WHERE REQUISITE TECHNOLOGY IS BEING

DEVELOPED, TESTED, OR IMPLEMENTED. DDC SHALL ALSO PROVIDE ALL REASONABLE ASSISTANCE TO ALLOW THE

COMPLIANCE AUDITOR TO MONITOR DDC’S PROGRESS IN MEETING THE REQUIREMENTS, INCLUDING: MAKING

EMPLOYEES OR CONTRACTORS AVAILABLE TO ANSWER QUESTIONS, TO PROVIDE UPDATES, AND TO DISCUSS NEXT

STEPS; AND PROVIDING A RUNNING TOTAL OF ALL MONIES SPENT IN DEVELOPING AND IMPLEMENTING THE REQUISITE

TECHNOLOGY. DDC DOES NOT WAIVE, AND SPECIFICALLY RESERVES, ALL PRIVILEGES APPLICABLE TO INFORMATION

PROVIDED TO THE COMPLIANCE AUDITOR.

35. THE COMPLIANCE AUDITOR SHALL SUBMIT QUARTERLY REPORTS TO THE UNITED STATES AND TO THE

CEO PROVIDING HIS OR HER INDEPENDENT, UNREVIEWED ASSESSMENT AND ANALYSIS OF: DDC’S PROGRESS IN

DEVELOPING AND IMPLEMENTING THE REQUISITE TECHNOLOGY; THE LIKELIHOOD OF DDC’S MEETING THE

COMPLIANCE SCHEDULES SET FORTH IN THIS DECREE; THE ADEQUACY AND SUFFICIENCY OF THE RESOURCES BEING

PROVIDED BY DDC FOR THE PURPOSES OF THIS DECREE; AND THE NEEDED MEASURES BEYOND THOSE BEING TAKEN

BY DDC SO AS TO ENSURE COMPLIANCE WITH THE REQUIREMENTS OF THIS DECREE. THE COMPLIANCE AUDITOR’S

ASSESSMENT AND ANALYSIS SHALL BE SUPPORTED WITH CITATIONS TO RELEVANT DOCUMENTS, TEST RESULTS,

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DISCUSSIONS WITH COMPANY OFFICIALS, AND OTHER SOURCES REGARDING DDC’S PROGRESS IN MEETING THE

REQUIREMENTS OF THIS DECREE. ANY STATEMENTS OF THE COMPLIANCE AUDITOR SHALL BE DEEMED TO BE HIS OR

HER OWN PERSONAL OPINIONS AND SHALL BE NEITHER BINDING ON, NOR ADMISSIONS OF, DDC WITH REGARD TO ANY

ISSUE. PRIOR TO ANY PUBLIC RELEASE OF A REPORT BY THE COMPLIANCE AUDITOR, OR ITS CONTENTS, THE UNITED

STATES SHALL PROVIDE DDC WITH AN OPPORTUNITY TO DESIGNATE ALL OR PART THEREOF AS CONFIDENTIAL

BUSINESS INFORMATION IN ACCORDANCE WITH 40 C.F.R. PART 2. IN ADDITION, THE QUARTERLY REPORTS SHALL

INCLUDE THE FOLLOWING:

(A) A SUMMARY OF THE RELEVANT TECHNOLOGIES BEING DEVELOPED BY DDC;

(B) THE NAMES AND ADDRESSES OF ANY CONTRACTOR BEING USED BY DDC TO DEVELOP THE

RELEVANT TECHNOLOGY AND A SUMMARY OF WHAT TASKS THE CONTRACTOR HAS BEEN HIRED TO PERFORM;

(C) A SUMMARY OF THE DEVELOPMENTAL WORK DONE OVER THE LAST THREE MONTHS BY DDC OR

ANY SUCH CONTRACTOR HIRED BY DDC;

(D) A SUMMARY OF ANY TESTING DONE BY DDC WITH RESPECT TO ANY RELEVANT TECHNOLOGY BEING

DEVELOPED, INCLUDING ALL SIGNIFICANT TEST RESULTS PERTINENT TO DDC’S PROGRESS IN MEETING THE

REQUIREMENTS OF THIS DECREE;

(E) A SUMMARY OF DDC’S ACTIVITIES OVER THE PREVIOUS THREE MONTHS REGARDING THE

IMPLEMENTATION OF ANY RELEVANT TECHNOLOGY NEEDED TO MEET THE REQUIREMENTS OF THIS DECREE,

INCLUDING DEVELOPMENTAL WORK DONE ON SECONDARY COMPONENTS SUCH AS THE RADIATORS TO ACCOMMODATE

NOX REDUCTION TECHNOLOGIES, COORDINATION WITH TRUCK BUILDERS TO ACCOMMODATE ENGINE CHANGES, AND

THE DEVELOPMENT OF SUPPLY CONTRACTS;

(F) AN ACCOUNTING OF THE MONEY AND RESOURCES EXPENDED BY DDC OVER THE PREVIOUS

QUARTER TO DEVELOP AND IMPLEMENT RELEVANT TECHNOLOGY;

(G) THE BUDGET FOR, AND SUMMARY OF, ALL RELEVANT ACTIVITIES EXPECTED TO TAKE PLACE IN THE

NEXT QUARTER; AND

(H) THE COMPLIANCE AUDITOR’S STATEMENT OR OPINION REGARDING THE NEED TO MODIFY DDC’S

DEVELOPMENT AND IMPLEMENTATION PLAN, INCLUDING NEXT STEPS THAT MAY BE NECESSARY TO ACHIEVE

COMPLIANCE WITH THE SCHEDULES SET OUT IN THIS DECREE.

36. THE FIRST REPORT PURSUANT TO PARAGRAPH 35 SHALL BE SUBMITTED TO THE UNITED STATES WITHIN

180 DAYS FOLLOWING THE DATE OF ENTRY AND SHALL INCLUDE ALL OF THE ABOVE INFORMATION WITH RESPECT TO

ALL ACTIVITIES UNDERTAKEN BY DDC UP TO THE TIME OF THE FIRST REPORT, INCLUDING ACTIVITIES PREDATING

ENTRY OF THIS DECREE, IF ANY. SUBSEQUENT REPORTS SHALL BE PROVIDED WITHIN 30 DAYS AFTER THE CLOSE OF

EACH CALENDAR QUARTER, COMMENCING WITH THE FIRST FULL QUARTER FOLLOWING THE INITIAL REPORT, AND

SHALL PROVIDE THE INFORMATION DESCRIBED ABOVE WITH RESPECT TO THE QUARTER COVERED BY THE REPORT.

UPON REASONABLE NOTICE, THE COMPLIANCE AUDITOR SHALL ALSO BE AVAILABLE TO ANSWER ORAL AND WRITTEN

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QUESTIONS FROM THE UNITED STATES REGARDING THE ACTIVITIES OF DDC IN MEETING THE REQUIREMENTS OF THIS

DECREE. ANY STATEMENTS OF THE COMPLIANCE AUDITOR SHALL BE DEEMED TO BE HIS OR HER OWN PERSONAL

OPINIONS AND SHALL BE NEITHER BINDING ON, NOR ADMISSIONS OF, DDC WITH REGARD TO ANY ISSUE.

37. ATTORNEYS FOR DDC MAY BE PRESENT DURING ANY COMMUNICATION BETWEEN THE GOVERNMENT

AND THE COMPLIANCE AUDITOR WHERE THE GOVERNMENT IS REPRESENTED BY AN ATTORNEY OR AN EPA OFFICE OF

ENFORCEMENT AND COMPLIANCE ASSURANCE STAFF PERSON.

B. IN-USE TESTING PROGRAM

38. DDC SHALL PERFORM, BY ITSELF OR IN CONJUNCTION WITH OTHER SETTLING HDDE MANUFACTURERS,

AN IN-USE TESTING PROGRAM TO ENSURE DIESEL ENGINES MANUFACTURED OR MODIFIED BY DDC MEET THE

REQUIREMENTS OF THIS CONSENT DECREE WHEN DRIVEN UNDER CONDITIONS WHICH CAN REASONABLY BE EXPECTED

TO BE ENCOUNTERED DURING NORMAL VEHICLE OPERATION AND USE, AND TO EVALUATE THE EFFECTIVENESS OF

MODIFICATIONS TO ENGINE DESIGN MADE IN RESPONSE TO THE REQUIREMENTS OF THIS CONSENT DECREE IN

REDUCING EMISSIONS. SPECIFICALLY, DDC SHALL CONDUCT TESTING TO ASSESS IN-USE MOBILE MONITORING

TECHNOLOGIES, ESTABLISH CALIBRATION AND OPERATING PROCEDURES FOR SELECTED MONITORING TECHNOLOGIES,

ESTABLISH A BASELINE EMISSION CHARACTERIZATION, AND CONDUCT ON-ROAD TESTING TO MONITOR IN-USE

COMPLIANCE ON REPRESENTATIVE HDDES MANUFACTURED BY DDC. THIS PROGRAM SHALL BE CONDUCTED IN FOUR

PHASES. DDC IS OBLIGATED TO SPEND THE SUM OF TWO MILLION DOLLARS ($2,000,000) ON THE IN-USE TESTING

PROGRAM, ALLOCATED IN ACCORDANCE WITH THE PERCENTAGES SET FORTH BELOW.

39. SHOULD DDC ELECT TO PERFORM THE IN-USE TESTING PROGRAM, OR ANY PHASE THEREOF, IN

CONJUNCTION WITH OTHER SETTLING HDDE MANUFACTURERS, THE REFERENCES IN PARAGRAPHS 38 THROUGH 59 TO

DDC SHALL REFER TO DDC AND ALL OTHER SETTLING HDDE MANUFACTURERS WHO ELECT TO PERFORM THE

OBLIGATIONS OF PARAGRAPHS 38 THROUGH 59 JOINTLY, BUT THE AMOUNT DDC ITSELF IS REQUIRED TO SPEND ON

THE IN-USE TESTING PROGRAM SHALL NOT BE CHANGED BY SUCH ELECTION. IN THE EVENT DDC ELECTS TO

PERFORM ANY OF THE OBLIGATIONS OF PARAGRAPHS 38 THROUGH 59 JOINTLY WITH OTHER SETTLING HDDE

MANUFACTURERS, IT SHALL SO NOTIFY THE UNITED STATES IN THE SCOPE OF WORK FOR EACH PHASE OF THE

PROGRAM TO BE IMPLEMENTED JOINTLY, AND PROVIDE THE NAMES OF THE OTHER SETTLING HDDE

MANUFACTURERS WITH WHOM DDC IS GOING TO PERFORM THE WORK. IF DDC ELECTS TO PERFORM ANY

OBLIGATION UNDER PARAGRAPHS 38 THROUGH 59 WITH OTHER SETTLING HDDE MANUFACTURERS, DDC SHALL

REMAIN OBLIGATED TO FULFILL ALL OF THE REQUIREMENTS OF PARAGRAPHS 38 THROUGH 59, AND SHALL BE LIABLE

FOR STIPULATED PENALTIES PURSUANT TO PARAGRAPH 116 FOR ANY FAILURE TO THE SAME EXTENT AS IF THE

OBLIGATION WERE UNDERTAKEN SOLELY BY DDC.

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40. IN PHASE I, DDC SHALL CONDUCT ENGINEERING STUDIES TO DETERMINE THE CORRELATION, ACCURACY,

PRECISION, AND REPEATABILITY OF EXISTING MOBILE MONITORING TECHNOLOGIES. THE PURPOSE OF THE

ENGINEERING STUDIES IS TO ASSESS THE TECHNOLOGY OR TECHNOLOGIES IN TERMS OF THEIR ABILITY TO PROVIDE

ACCURATE DATA REGARDING THE MASS OF REGULATED GASEOUS EMISSIONS AND ACTUAL ENGINE TORQUE, SO THIS

INFORMATION CAN BE INCORPORATED IN THE USE OF MOBILE MONITORING EQUIPMENT FOR THE ON-ROAD TESTING

REQUIRED UNDER PHASES III AND IV. PHASE I SHALL ALSO INCLUDE ENGINEERING STUDIES TO DETERMINE THE

HIGHEST DEGREE OF ACCURACY AND PRECISION OF REPORTED ENGINE OUTPUT TORQUE ACHIEVABLE CONSISTENT

WITH GOOD ENGINEERING PRACTICES.

41. NOT LATER THAN JANUARY 1, 1999, DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR

REVIEW AND APPROVAL BY EACH, A SINGLE SCOPE OF WORK FOR PHASE I. THE SCOPE OF WORK SHALL IDENTIFY THE

MOBILE MONITORING TECHNOLOGY(IES) TO BE EVALUATED, THE PROCEDURES FOR EVALUATING IN-USE MONITORING

EQUIPMENT, THE FACILITY THAT WILL CONDUCT THE EVALUATION, THE COMPANIES THAT WILL PARTICIPATE IN THE

PROGRAM, AND THE SCHEDULES FOR IMPLEMENTING THOSE TASKS.

42. WITHIN THIRTY (30) DAYS AFTER SUBMISSION OF THE PROPOSED SCOPE OF WORK, THE UNITED STATES

SHALL APPROVE THE SCOPE OF WORK OR PROPOSE MODIFICATIONS. WITHIN 10 DAYS FOLLOWING EPA’S PROPOSED

MODIFICATIONS DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED

MODIFICATIONS, OR IF THE MODIFICATIONS REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS

REQUESTED BY CARB, THE DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI.

THE WORK SET FORTH IN THE SCOPE OF WORK, AS APPROVED, SHALL BE COMPLETED BY SEPTEMBER 1, 1999.

43. IF, PRIOR TO THE CONCLUSION OF PHASE I, DDC BELIEVES THE EXPENDITURE OF ADDITIONAL FUNDS IN

EXCESS OF THE AMOUNT ALLOTTED UNDER THE SCOPE OF WORK WOULD MATERIALLY IMPROVE THE CAPABILITIES OF

THE MOBILE MONITORING EQUIPMENT, IT MAY PETITION THE UNITED STATES TO INCREASE THE PERCENTAGE OF

DDC’S OBLIGATION ALLOCATED TO PHASE I. THE UNITED STATES RESERVES THE RIGHT TO DISAPPROVE SUCH A

REQUEST, AND ANY DENIAL OF SUCH A REQUEST SHALL NOT BE SUBJECT TO DISPUTE RESOLUTION.

44. DDC SHALL INCLUDE IN THE QUARTERLY REPORTS SUBMITTED PURSUANT TO PARAGRAPH 105 A

DESCRIPTION OF THE PROGRESS OF TESTING UNDER PHASE I, AND SHALL SUBMIT A FINAL REPORT WITHIN 30 DAYS OF

THE COMPLETION OF THE WORK, SUMMARIZING THE STUDY, AND INCLUDING ALL TEST DATA AND OTHER INFORMATION

NOT PREVIOUSLY PROVIDED WITH THE PERIODIC REPORTS.

45. DDC SHALL SUBMIT TO THE UNITED STATES, WITHIN 60 DAYS OF THE COMPLETION OF THE WORK UNDER

PHASE I, A DESCRIPTION OF ITS PROPOSED MONITORING EQUIPMENT FOR USE IN PHASES III AND IV. SUCH REPORT

SHALL INCLUDE ANY MODIFICATION TO IMPROVE ITS CORRELATION, ACCURACY, PRECISION, AND REPEATABILITY,

WHICH DDC PROPOSES SHOULD BE INCORPORATED INTO THE PROPOSED MONITORING EQUIPMENT. THE UNITED

STATES SHALL REVIEW AND APPROVE OR DISAPPROVE THE PROPOSED MODIFICATIONS WITHIN 30 DAYS. ANY

DISAPPROVAL OF A PROPOSED MODIFICATION SHALL NOT BE SUBJECT TO DISPUTE RESOLUTION.

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46. DDC SHALL IMPLEMENT ANY APPROVED OR AGREED-UPON IMPROVEMENT TO THE IN-USE MONITORING

EQUIPMENT APPROVED PURSUANT TO PHASE I BY FEBRUARY 1, 2000. THE COST OF ANY SUCH MODIFICATION

RELATING TO IMPROVING THE ACCURACY AND PRECISION OF REPORTED ENGINE OUTPUT TORQUE SHALL BE BORNE BY

DDC AND SHALL NOT BE DEDUCTED FROM THE AMOUNT DDC IS OBLIGATED TO SPEND IN ACCORDANCE WITH

PARAGRAPH 38 AND 83. THE COST OF ANY OTHER APPROVED MODIFICATION, AND THE COST OF PROCURING THE

EQUIPMENT FOR THE PHASES III AND IV STUDIES, SHALL BE CONSIDERED TO BE PART OF THE AMOUNT DDC IS

OBLIGATED TO SPEND IN ACCORDANCE WITH EITHER PARAGRAPH 38 OR 83 OR BOTH, TO BE DETERMINED BY THE

UNITED STATES IN ITS UNREVIEWABLE DISCRETION.

47. DDC MAY NOT AVOID ITS OBLIGATION TO DO TESTING UNDER PHASES III AND IV ON THE BASIS OF ANY

CLAIMED INADEQUACY IN MOBILE MONITORING TECHNOLOGY. NOTWITHSTANDING THE FOREGOING SENTENCE,

NOTHING HEREIN SHALL CONSTITUTE A WAIVER OF RIGHTS ANY PARTY MAY HAVE UNDER APPLICABLE PRINCIPLES OF

LAW WITH RESPECT TO THE USE OF TEST RESULTS IN ANY PROCEEDING TO ENFORCE THIS CONSENT DECREE OR THE

ACT.

48. IN PHASE II OF THE IN-USE TESTING PROGRAM, DDC SHALL DEVELOP IN-USE TESTING PROCEDURES TO

BE USED IN CONNECTION WITH PHASES III AND IV OF THE IN-USE TESTING PROGRAM. THE DEVELOPMENT OF IN-USE

TESTING PROCEDURES SHALL BE BASED ON TESTING OF HDDES ENGAGED IN A VARIETY OF TYPICAL ON-ROAD

MISSIONS, AND IN A VARIETY OF SEASONAL CONDITIONS, AND SHALL UTILIZE ENGINES EXTENDING OVER VARIOUS

STAGES OF THEIR USEFUL LIFE. THE TESTING PROCEDURES SHALL INCLUDE THE IDENTIFICATION OF CANDIDATE

DRIVING ROUTES REPRESENTING TYPICAL URBAN, SUBURBAN, AND HIGHWAY DRIVING. THE CANDIDATE ROUTES

SHALL BE OF SUFFICIENT LENGTH TO TAKE 45 MINUTES WHEN DRIVEN AT POSTED SPEEDS. AT LEAST ONE (1)

CANDIDATE DRIVING ROUTE SHALL INCLUDE A PORTION WHERE AT LEAST 15 MINUTES OF OPERATION AT 65 MPH OR

GREATER IS PERMITTED AND GENERALLY ATTAINED BY TRUCKS.

49. NOT LATER THAN MARCH 1, 1999, DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR

REVIEW AND APPROVAL BY EACH, A SINGLE SCOPE OF WORK FOR PHASE II, IDENTIFYING THE TESTING PROCEDURES

FOR IN-USE MONITORING EQUIPMENT AND DRIVING ROUTES TO BE EVALUATED DURING PHASE II. WITHIN THIRTY (30)

DAYS AFTER SUBMISSION OF THE PROPOSED SCOPE OF WORK, THE UNITED STATES SHALL APPROVE THE SCOPE OF

WORK OR PROPOSE MODIFICATIONS. DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS WITHIN 30 DAYS OF

RECEIVING THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, OR IF THE

MODIFICATIONS REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB, THE

DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. DDC SHALL IMPLEMENT

THE PLAN AS APPROVED.

50. DDC SHALL COMPLETE PHASE II NO LATER THAN NOVEMBER 1, 1999.

51. DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, NO LATER THAN 30 DAYS AFTER COMPLETION

OF PHASE II, A SINGLE REPORT THAT INCLUDES A SUMMARY OF ALL TEST DATA, RECOMMENDED TEST PROCEDURES,

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AND IDENTIFICATION OF CANDIDATE DRIVING ROUTES FOR USE IN PHASES III AND IV. WITHIN THIRTY (30) DAYS

AFTER SUBMISSION OF THE REPORT, THE UNITED STATES SHALL APPROVE THE REPORT OR PROPOSE MODIFICATIONS.

DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, OR

IF THE MODIFICATIONS REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB,

THE DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. THE REPORT, AS

APPROVED, SHALL FORM THE BASIS FOR THE TESTING WHICH DDC SHALL CONDUCT IN PHASES III AND IV.

52. DDC SHALL SPEND NO MORE THAN 20% OF THE AMOUNT SET FORTH IN PARAGRAPH 38 ON PHASES I AND

II.

53. IN PHASE III DDC SHALL CONDUCT EMISSIONS TESTING ON A VARIETY OF ITS IN-SERVICE DIESEL ENGINES

TO CHARACTERIZE REAL WORLD EMISSIONS FROM SUCH DIESEL ENGINES. THE PURPOSE OF THIS TESTING IS TO

ESTABLISH A BASELINE SET OF EMISSION DATA ON A WIDE RANGE OF IN-USE ENGINES OF VARYING AGE AND SERVICE

CHARACTERISTICS IN ORDER TO DEMONSTRATE THE EFFECTIVENESS OF THE CHANGES MADE TO ENGINES PRODUCED

OR MODIFIED IN ACCORDANCE WITH THE CONSENT DECREE. THE FOCUS OF THIS TESTING SHALL BE 1988 THROUGH

1998 MODEL YEAR ENGINES, AND SHALL INCLUDE A MIX OF ON-ROAD AND LABORATORY TESTING.

54. DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR REVIEW AND APPROVAL BY EACH, A

SINGLE SCOPE OF WORK FOR PHASE III NO LATER THAN NOVEMBER 1, 1999. THE SCOPE OF WORK SHALL IDENTIFY

THE PROPOSED ENGINES TO BE TESTED, THE TEST SCHEDULE, AND ANY TESTING ROUTES OR FACILITIES. WITHIN

THIRTY (30) DAYS AFTER SUBMISSION OF THE PROPOSED SCOPE OF WORK, THE UNITED STATES SHALL APPROVE THE

SCOPE OF WORK OR PROPOSE MODIFICATIONS. DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS WITHIN 30

DAYS OF RECEIVING THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, OR IF THE

MODIFICATIONS REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB, THE

DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. DDC SHALL IMPLEMENT

THE SCOPE OF WORK AS APPROVED.

55. NOT LATER THAN FEBRUARY 1, 2000, OR, IF EPA AGREES, ONE MONTH AFTER THE IMPROVEMENTS TO

THE IN-USE MONITORING EQUIPMENT ARE IMPLEMENTED, DDC SHALL COMMENCE TESTING FOR PHASE III. TESTING

DATA SHALL BE REPORTED QUARTERLY THROUGHOUT PHASE III.

56. DDC SHALL COMPLETE PHASE III EIGHT MONTHS AFTER COMMENCEMENT, AND SHALL SUBMIT TO THE

UNITED STATES A REPORT DESCRIBING TESTS AS PERFORMED, TEST CONDITIONS, ENGINES TESTED, AND TEST RESULTS.

DDC SHALL SPEND NO MORE THAN 20% OF THE AMOUNT SET FORTH IN PARAGRAPH 38 ON PHASE III.

57. IN PHASE IV, DDC SHALL CONDUCT ON-ROAD COMPLIANCE MONITORING ON ITS HDDES USING THE

MONITORING TECHNOLOGY AND PREVIOUSLY DEFINED TESTING PROCEDURES AND DRIVING ROUTES APPROVED

PURSUANT TO PHASES I AND II, UNTIL THE FUNDS SET FORTH IN PARAGRAPH 38 HAVE BEEN FULLY EXPENDED. IN

ADDITION TO USING THE PREVIOUSLY DEFINED TESTING PROCEDURES AND DRIVING ROUTES, DDC SHALL FOLLOW THE

VEHICLE SELECTION PROCEDURES AND DATA REPORTING REQUIREMENTS SET FORTH IN APPENDIX D.

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58. DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR REVIEW AND APPROVAL BY EACH, A

SINGLE PROPOSED SCOPE OF WORK FOR PHASE IV CONSISTENT WITH APPENDIX D NO LATER THAN NOVEMBER 1,

1999. THE SCOPE OF WORK SHALL INCLUDE AN ITEMIZED COST ESTIMATE OF THE TESTING IDENTIFIED IN APPENDIX D

AND SHALL REQUIRE TESTING TO BEGIN WITH MODEL YEAR 2000 HDDES. WITHIN THIRTY (30) DAYS AFTER

SUBMISSION OF THE PROPOSED SCOPE OF WORK, THE UNITED STATES SHALL APPROVE THE SCOPE OF WORK OR

PROPOSE MODIFICATIONS. DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS WITHIN 30 DAYS OF RECEIVING

THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, OR IF THE MODIFICATIONS

REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB, THE DISPUTE SHALL BE

GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. DDC SHALL IMPLEMENT THE SCOPE OF

WORK AS APPROVED. TESTING DATA SHALL BE REPORTED MONTHLY THROUGHOUT PHASE IV.

59. DDC SHALL SUBMIT TO THE UNITED STATES QUARTERLY PHASE IV REPORTS WHICH INCLUDE THE

AMOUNT OF MONEY SPENT ON TESTING REQUIRED BY THIS PARAGRAPH. IF, AT ANY TIME, DDC CONTENDS IT CANNOT

COMPLETE THE REQUIRED TESTING WITH THE FUNDS REMAINING, IT SHALL NOTIFY THE UNITED STATES, PROVIDE A

DETAILED EXPLANATION OF THE REASONS IT CANNOT COMPLETE THE REQUIRED TESTING WITH THE REMAINING FUNDS,

AND PROPOSE MODIFICATIONS TO THE PHASE IV SCOPE OF WORK TO CONFORM THE REMAINING TESTING OBLIGATION

TO THE AVAILABLE FUNDS. WITHIN THIRTY (30) DAYS AFTER SUBMISSION OF THE PROPOSED MODIFICATIONS, THE

UNITED STATES SHALL APPROVE DDC’S PROPOSED MODIFICATIONS OR PROPOSE ITS OWN MODIFICATIONS. DDC

SHALL INCORPORATE THE PROPOSED MODIFICATIONS WITHIN 30 DAYS OF RECEIVING THE PROPOSED MODIFICATIONS;

BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, OR IF THE MODIFICATIONS REQUESTED BY THE UNITED STATES

CONFLICT WITH MODIFICATIONS REQUESTED BY CARB, THE DISPUTE SHALL BE GOVERNED BY THE DISPUTE

RESOLUTION PROVISIONS OF SECTION XVI. DDC SHALL IMPLEMENT THE MODIFIED SCOPE OF WORK AS APPROVED,

BUT IN NO EVENT SHALL DDC BE OBLIGATED TO SPEND MORE THAN THE AMOUNT SPECIFIED IN PARAGRAPH 38.

IX. ADDITIONAL INJUNCTIVE RELIEF

A. NONROAD CI ENGINE EMISSIONS STANDARD PULL-AHEAD

60. ALL NONROAD CI ENGINES MANUFACTURED BY DDC ON OR AFTER JANUARY 1, 2005, WITH A

HORSEPOWER EQUAL TO OR GREATER THAN 300 BUT LESS THAN 750 SHALL MEET 3.0 G/BHP-HR FOR NOX PLUS

NMHC WHEN MEASURED ON THE APPLICABLE FTP FOR THOSE ENGINES. IN ADDITION, ALL NONROAD CI ENGINES

MANUFACTURED BY DDC ON OR AFTER JANUARY 1, 2005, WITH A HORSEPOWER EQUAL TO OR GREATER THAN 300

BUT LESS THAN 750 SHALL COMPLY WITH ALL OTHER REQUIREMENTS THAT WOULD APPLY AS IF THE ENGINES WERE

MODEL YEAR 2006 ENGINES. THE STANDARDS SET FORTH IN THIS PARAGRAPH SHALL BE MET THROUGHOUT THE

USEFUL LIFE OF THE ENGINE.

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61. WITH RESPECT TO THE LIMITS SPECIFIED IN PARAGRAPH 60 OF THIS DECREE, DDC SHALL BE SUBJECT TO

AND COMPLY WITH ALL REQUIREMENTS OF 40 C.F.R. PART 89 AND OF THE ACT, AND SHALL BE ENTITLED TO INVOKE

THE ADMINISTRATIVE PROCEDURES OF EPA’S REGULATIONS AND THE ACT THAT WOULD BE APPLICABLE IF THOSE

LIMITS WERE EMISSION STANDARDS AND PROCEDURES ADOPTED UNDER SECTIONS 202(A)(3) AND 206 OF THE ACT, 42

U.S.C. §§ 7521(A)(3) AND 7525, INCLUDING ALL CERTIFICATION, WARRANTY, SELECTIVE ENFORCEMENT AUDITING

UNDER SECTION 206(B) OF THE ACT, ADMINISTRATIVE RECALL UNDER SECTION 207(C) OF THE ACT, 42 U.S.C.

§ 7541(C), AND RECORD KEEPING AND REPORTING REQUIREMENTS, EXCEPT AS FOLLOWS:

(A) ANY DISPUTE ARISING UNDER OR RELATING TO THE PARTIES’ OBLIGATIONS UNDER THIS CONSENT

DECREE REGARDING SUCH LIMITS SHALL NOT BE SUBJECT TO THE PROVISIONS OF SECTION 307 OF THE ACT, 42 U.S.C.

§7607, BUT INSTEAD SHALL BE RESOLVED THROUGH THE DISPUTE RESOLUTION PROCEDURES IN SECTION XVI OF THIS

CONSENT DECREE;

(B) SECTION 304 OF THE ACT DOES NOT APPLY TO COMPLIANCE WITH THE REQUIREMENTS OF

PARAGRAPH 60 OF THIS DECREE; AND

(C) FOR HEARINGS REGARDING COMPLIANCE WITH PARAGRAPH 60 OF THIS DECREE, EPA SHALL

APPOINT A HEARING OFFICER WHO SHALL PRESIDE AT ANY HEARING AT WHICH AN ADMINISTRATIVE LAW JUDGE WOULD

PRESIDE IF THE STANDARDS WERE IN EFFECT IN MODEL YEAR 2005.

62. EPA MAY EXERCISE ANY AUTHORITY UNDER ITS REGULATIONS FOUND AT 40 C.F.R. PART 89 OR UNDER

THE ACT, INCLUDING CERTIFICATION, SELECTIVE ENFORCEMENT AUDITING, ADMINISTRATIVE RECALL, AND TAKING

ENFORCEMENT ACTION AGAINST PROHIBITED ACTS THAT WOULD BE APPLICABLE IF THE LIMITS SPECIFIED IN

PARAGRAPH 60 OF THIS DECREE WERE EMISSIONS STANDARDS AND PROCEDURES ADOPTED UNDER SECTION 213 OF

THE ACT.

63. EXCEPT AS SPECIFIED, THIS DECREE DOES NOT MODIFY, CHANGE, OR LIMIT IN ANY WAY THE RIGHTS AND

OBLIGATIONS OF THE PARTIES UNDER THE ACT AND EPA’S REGULATIONS WITH RESPECT TO THE CONTROL OF

EMISSIONS FROM NONROAD CI ENGINES.

B. LOW NOX REBUILD PROGRAM

64. DDC SHALL IMPLEMENT, IN ACCORDANCE WITH THIS SECTION, A PROGRAM TO REDUCE NOX EMISSIONS

FROM DDC’S LOW NOX REBUILD ENGINES (AS DEFINED BELOW) THROUGH CERTAIN SOFTWARE AND/OR MINOR

HARDWARE CHANGES MADE TO THE ENGINES THROUGH THE USE OF A LOW NOX REBUILD KIT. THE TERM “LOW NOX

REBUILD ENGINES” MEANS: DDC’S MODEL YEAR 1994 AND LATER MHDDE AND HHDDE PRE-SETTLEMENT

ENGINES IF DDC ELECTS OPTION A BELOW; OR MODEL YEAR 1993 AND LATER MHDDE AND HHDDE PRE­

SETTLEMENT ENGINES IF DDC ELECTS OPTION B BELOW, BUT SHALL EXCLUDE, IN EITHER CASE, DDC’S LOW-VOLUME

RATINGS REPRESENTING NOT MORE THAN 10% IN THE AGGREGATE OF THE TOTAL VOLUME OF MHDDE AND HHDDE

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PRE-SETTLEMENT ENGINES MANUFACTURED DURING THE APPLICABLE MODEL YEARS TO AVOID REQUIRING UNIQUE

CALIBRATIONS OR OTHER MODIFICATIONS FOR SUCH RATINGS WHERE IT WOULD BE UNDULY BURDENSOME IN

RELATIONSHIP TO THE NUMBER OF ENGINES INVOLVED AND THE EXPECTED EMISSION REDUCTIONS.

65. WITHIN 90 DAYS OF THE DATE OF FILING, DDC SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR

REVIEW AND APPROVAL BY EACH, A SINGLE PLAN FOR THE IMPLEMENTATION OF ITS LOW NOX ENGINE REBUILD

PROGRAM. EACH LOW NOX REBUILD KIT DESIGNED AND DEVELOPED BY DDC SHALL MEET THE EMISSION LIMITS

UNDER EITHER OPTION A OR OPTION B:

OPTION A:

FOR MHDDES ONLY:

(A) EURO III COMPOSITE VALUE LIMITS FOR NOX OF 6.0 G/BHP-HR FOR MODEL YEARS

1994-1998 ENGINES, 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER REGULATED

POLLUTANTS WHEN TESTED ON THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C

OF THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX;

(B) AN NTE LIMIT FOR NOX OF 7.5 G/BHP-HR FOR MODEL YEARS 1994-1998 ENGINES.

FOR HHDDES ONLY:

(C) EURO III COMPOSITE VALUE LIMITS FOR NOX OF 7.0 G/BHP-HR FOR MODEL YEARS

1994-1998 ENGINES, 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER REGULATED

POLLUTANTS WHEN TESTED ON THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C

OF THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX;

AND

(D) AN NTE LIMIT FOR NOX OF 8.75 G/BHP-HR FOR MODEL YEARS 1994-1998 ENGINES.

OPTION B:

FOR MHDDES ONLY:

(A) EURO III COMPOSITE VALUE LIMITS FOR NOX OF 6.5 G/BHP-HR FOR MODEL YEARS

1993-1998 ENGINES, 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER REGULATED

POLLUTANTS WHEN TESTED ON THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C

OF THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX;

(B) AN NTE LIMIT FOR NOX OF 8.1 G/BHP-HR FOR MODEL YEAR 1993-1998 ENGINES.

FOR HHDDES ONLY:

(C) EURO III COMPOSITE VALUE LIMITS FOR NOX OF 7.5 G/BHP-HR FOR MODEL YEAR

1993-1998 ENGINES, 1.0 TIMES THE APPLICABLE FTP STANDARD FOR ALL OTHER REGULATED

POLLUTANTS WHEN TESTED ON THE EURO III TEST PROTOCOL IN ACCORDANCE WITH APPENDIX C

OF THIS DECREE, AND THE ASSOCIATED EMISSIONS SURFACE LIMITS SPECIFIED IN THAT APPENDIX;

AND

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(D) AN NTE LIMIT FOR NOX OF 9.38 G/BHP-HR FOR MODEL YEAR 1993-1998 ENGINES.

65A. DDC SHALL SUBMIT WITH THE PLAN PURSUANT TO PARAGRAPH 65 AN ADDITIONAL PLAN FOR THE

IMPLEMENTATION OF A LOW NOX URBAN BUS RETROFIT KIT PROGRAM FOR DDC’S URBAN BUS RETROFIT KITS THAT

HAVE BEEN CERTIFIED PURSUANT TO EPA’S URBAN BUS REBUILD PROGRAM, 40 C.F.R. § 1401, ET SEQ., FOR

PURPOSES OF RETROFITTING DDC’S MODEL YEAR 1988-1993 ELECTRONIC URBAN BUS ENGINES (HEREINAFTER, “LOW

NOX CERTIFIED URBAN BUS RETROFIT KITS”). EACH LOW NOX CERTIFIED URBAN BUS RETROFIT KIT SOLD BY

DDC AFTER JANUARY 1, 1999 SHALL HAVE THE SAME INJECTION TIMING VALUES WHEN THE ELECTRONIC CONTROL

STRATEGIES DESCRIBED IN APPENDIX B-1 ARE ACTIVE AS THE INJECTION TIMING VALUES (FOR THE SAME ENGINE

SPEED AND LOAD) USED DURING THE FTP BY MODEL YEAR 1990 ENGINES WITH THE SAME CONFIGURATION.

BEGINNING JANUARY 1, 1999, DDC AGREES TO MAKE AVAILABLE TO ANY ENTITY AT REASONABLE COST, THROUGH IT

AUTHORIZED DISTRIBUTORS AND DEALERS, THE SOFTWARE RECALIBRATIONS DESCRIBED IN THE PRECEDING SENTENCE,

INCLUDING, FOR EARLIER VERSIONS OF THE ELECTRONIC CONTROL STRATEGIES DESCRIBED IN APPENDIX B-1,

SOFTWARE RECALIBRATIONS THAT ARE AS CLOSE AS PRACTICABLE TO THOSE REQUIRED BY THE PRECEDING SENTENCE.

IN ADDITION, FOR DDC URBAN BUS REBUILD KITS USED TO REBUILD OR REMANUFACTURE ALCOHOL-FUELED ENGINES

OWNED BY THE LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION AUTHORITY (“LA MTA”), BETWEEN

JANUARY 1, 1998 AND JANUARY 1, 1999, DDC SHALL PROVIDE THE APPROPRIATE SOFTWARE RECALIBRATIONS

DESCRIBED IN THIS PARAGRAPH AT NO ADDITIONAL COST TO LA MTA. WITH RESPECT TO THE LOW NOX CERTIFIED

URBAN BUS RETROFIT KITS, DDC SHALL INCLUDE IN ITS PLAN SUBMITTED PURSUANT TO PARAGRAPH 65 AN

EXPLANATION OF DDC’S PLANS FOR COMPLIANCE WITH THIS PARAGRAPH. OTHER THAN THE REQUIREMENTS OF THIS

PARAGRAPH, NO OTHER REQUIREMENTS OF THIS SECTION SHALL APPLY TO THE DDC’S LOW NOX URBAN BUS

RETROFIT PROGRAM.

66. IF, PRIOR TO OR AFTER SUBMISSION OF A PLAN PURSUANT TO PARAGRAPH 65, DDC DETERMINES THAT IT

CANNOT MEET THE APPLICABLE LIMITS SPECIFIED IN PARAGRAPH 65 FOR ANY HDDE INDIVIDUAL ENGINE RATING

(REFERRED TO IN THIS PARAGRAPH AS A “SUBJECT RATING”) WITH SOFTWARE AND/OR MINOR HARDWARE CHANGES, IT

SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR REVIEW AND APPROVAL BY EACH, A SINGLE ALTERNATIVE OR

REVISED LOW NOX REBUILD PLAN IN ACCORDANCE WITH THIS PARAGRAPH. THE ALTERNATIVE OR REVISED PLAN

SHALL STATE THE NOX EMISSIONS THAT IT PROPOSES TO ACHIEVE FOR EACH SUBJECT RATING AND SHALL DESCRIBE

HOW DDC WILL OFFSET A NOX EMISSION LIMIT HIGHER THAN THE LIMITS IN PARAGRAPH 65 WITHIN THE SAME CLASS

OF ENGINES SUBJECT TO THE LOW NOX REBUILD PROGRAM. DDC MAY ELECT TO USE A PRODUCTION-WEIGHTED

AVERAGE APPROACH WITHIN THE APPLICABLE HDDE CLASS (I.E., HHDDE OR MHDDE) TO DEMONSTRATE

COMPLIANCE WITH THE APPLICABLE LIMIT SPECIFIED IN PARAGRAPH 65. THE NOX PRODUCTION-WEIGHTED AVERAGE

SHALL BE CALCULATED BY MULTIPLYING THE NOX EMISSION LEVEL THAT WILL BE ACHIEVED FOR EACH RATING

THROUGH THE USE OF THE APPROPRIATE LOW NOX REBUILD KIT BY THE PRODUCTION VOLUME FOR THE RATING,

SUMMING THOSE TERMS, AND DIVIDING BY THE TOTAL PRODUCTION LOW NOX REBUILD ENGINES. DDC’S

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ALTERNATIVE OR REVISED PLAN SUBMITTED PURSUANT TO THIS PARAGRAPH SHALL DEMONSTRATE THAT DDC’S LOW

NOX REBUILD KITS WOULD, ON A PRODUCTION-WEIGHTED NOX AVERAGE BASIS, ACHIEVE THE APPLICABLE LIMITS

SPECIFIED IN PARAGRAPH 65. AS AN ALTERNATIVE, IF DDC CONTENDS THAT ANY INDIVIDUAL RATING CANNOT MEET

THE APPLICABLE LIMITS, IT MAY ELECT TO INCREASE THE QUANTITY OF ENGINES INCLUDED IN THE LOW NOX REBUILD

PROGRAM BY INCLUDING PORTIONS OF EARLIER MODEL YEAR ENGINE FAMILIES, SUCH THAT THE PRODUCT OF THE

QUANTITY OF ADDITIONAL ENGINES AND ASSOCIATED NOX REDUCTION SHALL BE EQUIVALENT TO THE PRODUCT OF

THE QUANTITY OF ENGINES FOR THE SUBJECT RATING FROM THE ORIGINAL LOW NOX REBUILD PLAN AND THE NOX

EXCEEDANCE FOR THAT RATING.

67. IN ADDITION TO SOFTWARE AND MINOR HARDWARE NEEDED TO MEET THE REQUIREMENTS SPECIFIED IN

PARAGRAPH 65, ALL LOW NOX REBUILD KITS SHALL INCLUDE A LABEL MEETING THE REQUIREMENTS OF PARAGRAPH

77.

68. DDC SHALL MAKE AVAILABLE LOW NOX REBUILD KITS FOR DISTRIBUTION AND SALE FOR LOW NOX

REBUILD ENGINES ACCORDING TO THE FOLLOWING SCHEDULE:

I. BEGINNING 180 DAYS AFTER ENTRY OF THIS CONSENT DECREE, OR 90 DAYS FOLLOWING EPA’S APPROVAL

OF THE LOW NOX REBUILD PLAN REQUIRED IN PARAGRAPH 65, WHICHEVER IS LATER, DDC SHALL BEGIN SUPPLYING

LOW NOX REBUILD KITS.

II. WITHIN 90 DAYS FOLLOWING THE APPLICABLE DATE IN PARAGRAPH 68(I), DDC SHALL MAKE AVAILABLE

LOW NOX REBUILD KITS IN QUANTITIES NECESSARY TO MEET EXPECTED DEMAND FOR ENGINE FAMILIES

REPRESENTING AT LEAST FIFTY PERCENT OF THE ENGINES FOR WHICH LOW NOX REBUILD KITS MUST BE PRODUCED

UNDER THE LOW NOX REBUILD PLAN.

III. WITHIN 360 DAYS FOLLOWING THE APPLICABLE DATE IN PARAGRAPH 68(I), DDC SHALL MAKE

AVAILABLE LOW NOX REBUILD KITS IN QUANTITIES NECESSARY TO MEET EXPECTED DEMAND FOR ALL ENGINE

FAMILIES FOR WHICH LOW NOX REBUILD KITS MUST BE PRODUCED UNDER THE LOW NOX REBUILD PLAN.

69. BEGINNING ON THE DATE A LOW NOX REBUILD KIT IS AVAILABLE FOR ANY ENGINE FAMILY UNDER

PARAGRAPH 68, DDC SHALL SELL AND USE, AND AUTHORIZE THE SALE AND USE OF, ONLY LOW NOX REBUILD KITS

FOR ANY LOW NOX REBUILD ENGINE IN THAT FAMILY IN THE CASE OF ANY ENGINE REBUILD FOR:

(A) ANY HHDDE THAT HAS ACCUMULATED MILEAGE GREATER THAN 290,000 MILES, OR ANY MHDDE THAT

HAS ACCUMULATED MILEAGE GREATER THAN 185,000 MILES; OR

(B) ANY HHDDE OR MHDDE THAT HAS ACCUMULATED LESS THAN THE APPLICABLE MILEAGE SPECIFIED IN

PARAGRAPH 69(A), WHERE THE SERVICE EVENT INCLUDES REPLACEMENT OR RECONDITIONING OF MORE THAN ONE

MAJOR CYLINDER COMPONENT IN ALL OF THE ENGINE’S CYLINDERS.

70. A LOW NOX REBUILD KIT MAY NOT INCREASE ANY REGULATED EMISSION BEYOND APPLICABLE LIMITS

WHEN TESTED ON THE FTP.

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71. DDC SHALL INSTALL, AND SHALL AUTHORIZE ITS AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR

FACILITIES, AND REBUILD FACILITIES TO INSTALL ONLY LOW NOX REBUILD KITS AS REQUIRED UNDER PARAGRAPH 64

AT NO ADDED COST TO THE OWNER ABOVE THE AMOUNT THE OWNER WOULD OTHERWISE PAY TO HAVE THE ENGINE

REBUILT OR REPAIRED. IN ADDITION, SUBJECT TO THE PROVISIONS OF PARAGRAPH 72, DDC SHALL MAKE AVAILABLE,

EITHER DIRECTLY OR THROUGH ITS AFFILIATED DISTRIBUTION NETWORKS, AT NO ADDED COST, THE APPROPRIATE LOW

NOX REBUILD KIT TO ANY NON-AFFILIATED ENGINE REBUILDER OR PERSON WHO REQUESTS IT. FOR THE PURPOSES OF

THIS SECTION, “AT NO ADDED COST” SHALL MEAN:

(A) IF A LOW NOX REBUILD KIT CONTAINS PARTS NORMALLY REPLACED AT ENGINE REBUILD, DDC

SHALL NOT CHARGE MORE THAN THE THEN-CURRENT PRICE FOR THE ORIGINAL PART; AND

(B) IF A LOW NOX REBUILD KIT REQUIRES A PART NOT NORMALLY REPLACED DURING REBUILD, THEN

SUCH PART SHALL BE INCLUDED WITHOUT CHARGE. DDC SHALL MAKE ARRANGEMENTS TO REIMBURSE ITS

AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR FACILITIES, AND REBUILD FACILITIES, SO THAT THE ULTIMATE

PURCHASER OF A LOW NOX REBUILD KIT WILL NOT BE CHARGED FOR ANY REQUIRED REPROGRAMMING THROUGH ITS

AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR FACILITIES, AND REBUILD FACILITIES, INCLUDING ANY COMPUTER

CONNECTION FEES.

72. NOTWITHSTANDING THE PROVISIONS IN PARAGRAPH 71, DDC, ITS AUTHORIZED DEALERS, DISTRIBUTORS,

REPAIR FACILITIES, AND REBUILD FACILITIES MAY IMPOSE AN ADDITIONAL FEE FOR ENGINE CONTROL SOFTWARE THAT

INCLUDES BOTH THE LOW NOX REPROGRAMMING AND OTHER SOFTWARE ENHANCEMENTS FOR PURPOSES UNRELATED

TO REDUCING NOX EMISSIONS, PROVIDED THAT:

(A) THE CUSTOMER IS GIVEN THE OPTION OF OBTAINING LOW NOX REBUILD REPROGRAMMING ALONE

AT NO COST; AND

(B) THE CUSTOMER CHOOSES THE OPTION THAT INCLUDES SUCH OTHER SOFTWARE ENHANCEMENTS.

73. EACH LOW NOX REBUILD KIT SHALL BE CLEARLY MARKED WITH AN IDENTIFIABLE CHARACTERISTIC

ALLOWING THE UNITED STATES TO DETERMINE WHETHER A LOW NOX REBUILD ENGINE HAS BEEN REBUILT WITH THE

APPROPRIATE LOW NOX REBUILD KIT. THIS IDENTIFIABLE CHARACTERISTIC MAY BE A UNIQUE PART NUMBER OR

OTHER MARKING ON THE ENGINE CONTROL MODULE, OR MAY BE A READILY ACCESSIBLE SOFTWARE IDENTIFICATION

PARAMETER, INCLUDING ENGINE CODE MARKER OR CALIBRATION MARKER.

74. DDC SHALL TAKE ALL REASONABLE STEPS TO INFORM ITS AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR

FACILITIES, AND REBUILD FACILITIES ABOUT THE REQUIREMENTS OF THIS PROGRAM AND THE AVAILABILITY OF LOW

NOX REBUILD KITS, INCLUDING, BUT NOT LIMITED TO, SENDING WRITTEN NOTIFICATION TO THESE ENTITIES WITHIN

120 DAYS AFTER DDC’S LOW NOX REBUILD PLAN IS APPROVED.

75. IN ADDITION TO ANY REQUIREMENT SET FORTH ABOVE:

(A) DDC SHALL INCLUDE AS PART OF ITS LOW NOX REBUILD PLAN, SUBMITTED UNDER PARAGRAPH 65, THE

FOLLOWING:

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(I) A DESCRIPTION OF EACH ENGINE FAMILY TO BE COVERED BY A LOW NOX REBUILD KIT,

INCLUDING THE MODEL YEAR, MODEL, AND SUCH OTHER INFORMATION AS MAY BE REQUIRED TO IDENTIFY THE

ENGINES TO BE REBUILT WITH LOW NOX REBUILD KITS, AND ANY ENGINE RATINGS OTHERWISE COVERED BY THE LOW

NOX REBUILD PROGRAM WHICH DDC HAS ELECTED TO EXCLUDE UNDER THE TEN PERCENT EXCLUSION FOR LOW­

VOLUME RATINGS.

(II) A LIST OF ALL DDC’S AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR FACILITIES, AND

REBUILD FACILITIES WHO WILL INSTALL THE LOW NOX REBUILD KITS, AND A STATEMENT THAT THESE PERSONS WILL

BE PROPERLY EQUIPPED AND INSTRUCTED TO INSTALL SUCH KITS.

(III) A DESCRIPTION OF THE PROCEDURE TO BE FOLLOWED BY NON-AFFILIATED ENGINE REBUILD

FACILITIES OR PERSONS TO OBTAIN LOW NOX REBUILD KITS.

(IV) A DESCRIPTION OF THE SYSTEM BY WHICH DDC WILL ENSURE AN ADEQUATE NUMBER OF LOW

NOX REBUILD KITS WILL BE AVAILABLE TO BE INSTALLED BY AFFILIATED AND NON-AFFILIATED ENGINE REBUILD

FACILITIES, INCLUDING THE METHOD TO BE USED TO ENSURE THE SUPPLY OF LOW NOX REBUILD KITS REMAINS BOTH

ADEQUATE AND RESPONSIVE TO ENGINE REBUILD FACILITIES’ DEMAND.

(V) AN EXAMPLE OF THE WRITTEN NOTIFICATION TO BE SENT TO ALL OF DDC’S AUTHORIZED

DEALERS, DISTRIBUTORS, REPAIR FACILITIES, OR REBUILD FACILITIES.

(B) DDC SHALL SUBMIT TO EPA, 30 DAYS PRIOR TO THE DATE ANY LOW NOX REBUILD KIT WILL BE MADE

AVAILABLE, THE FOLLOWING ADDITIONAL INFORMATION:

(I) A STATEMENT OF THE NOX LIMITS EACH LOW NOX REBUILD KIT ACHIEVES, AND A

CERTIFICATION THAT THESE LIMITS MEET THE LIMITS APPLICABLE UNDER PARAGRAPH 65, OR, IF DDC ASSERTS SUCH

LIMITS CANNOT BE ACHIEVED, THE SUBMISSIONS REQUIRED UNDER PARAGRAPH 66.

(II) A COPY OF ALL NECESSARY INSTRUCTIONS TO BE SENT TO THOSE PERSONS WHO ARE TO INSTALL

LOW NOX REBUILD KITS. THIS SHALL INCLUDE DESIGNATION OF THE DATE ON OR AFTER WHICH THE LOW NOX

REBUILD KITS WILL BE AVAILABLE FROM DDC AND THE TIME REASONABLY NECESSARY TO PERFORM THE LABOR

REQUIRED TO INSTALL THE KITS.

(III) A DESCRIPTION OF THE IMPACT OF THE PROPOSED CHANGES ON FUEL CONSUMPTION,

DRIVEABILITY, AND SAFETY FOR EACH CLASS OR CATEGORY OF LOW NOX REBUILD ENGINES AND A BRIEF SUMMARY

OF THE DATA, TECHNICAL STUDIES, OR ENGINEERING EVALUATIONS WHICH SUPPORT THESE CONCLUSIONS.

76. THE WRITTEN NOTIFICATION TO BE SENT TO ALL DDC’S AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR

FACILITIES, AND REBUILD FACILITIES SHALL CONTAIN THE FOLLOWING:

(A) A COPY OF EPA’S LETTER TO REBUILD FACILITIES REGARDING THE USE OF LOW NOX REBUILD KITS.

(B) A CLEAR DESCRIPTION OF ACTIONS THAT WILL BE TAKEN IN THE REBUILD AND AN IDENTIFICATION

OF THE COMPONENTS THAT ARE AFFECTED BY THE LOW NOX REBUILD.

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(C) A DESCRIPTION OF THE PROCEDURES WHICH NON-AFFILIATED ENGINE REBUILDERS SHOULD FOLLOW

TO OBTAIN APPROPRIATE LOW NOX REBUILD KITS AND THE TIME REASONABLY NECESSARY TO PERFORM THE LABOR

REQUIRED TO INSTALL THE APPROPRIATE LOW NOX REBUILD KIT.

77. THE PLAN FOR DDC’S LOW NOX REBUILD PROGRAM SUBMITTED TO THE UNITED STATES SHALL

PROVIDE THAT ANY OF DDC’S AUTHORIZED DEALERS, DISTRIBUTORS, REPAIR FACILITIES, OR REBUILDERS WHO

INSTALL A LOW NOX REBUILD KIT SHALL BE INSTRUCTED TO COMPLETE AND AFFIX A LABEL TO THE ENGINE. THE

LABEL SHALL CONTAIN A STATEMENT WITH APPROPRIATE BLANK SPACES FOR THE REBUILDER TO INDICATE WHEN AND

BY WHOM THE LOW NOX REBUILD KIT WAS INSTALLED ON THE ENGINE. THE LABEL SHALL BE PLACED IN SUCH

LOCATION AS APPROVED BY EPA CONSISTENT WITH STATE LAW AND SHALL BE FABRICATED OF A MATERIAL SUITABLE

FOR THE LOCATION IN WHICH IT IS INSTALLED AND NOT READILY REMOVABLE INTACT. DDC SHALL ALSO PROVIDE

SUCH LABEL TO ANY NON-AFFILIATED ENGINE REBUILDER WHO INSTALLS ONE OF ITS LOW NOX REBUILD KITS AND

INSTRUCTIONS ON HOW TO COMPLETE THE LABEL AND WHERE TO AFFIX THE LABEL.

78. THE UNITED STATES (AFTER CONSULTATION WITH CARB), SHALL PROVIDE DDC WITH NOTICE OF

APPROVAL OR DISAPPROVAL OF ITS LOW NOX REBUILD PLAN WITHIN 30 DAYS OF ITS SUBMITTAL TO THE UNITED

STATES. IF THE PLAN IS DISAPPROVED, THE UNITED STATES SHALL PROVIDE THE REASONS FOR DISAPPROVAL, AND

DDC SHALL HAVE 30 DAYS TO SUBMIT A REVISED LOW NOX REBUILD PLAN FOR APPROVAL. ANY DISPUTE BETWEEN

THE PARTIES REGARDING THE LOW NOX REBUILD PLAN SHALL BE RESOLVED IN ACCORDANCE WITH THE DISPUTE

RESOLUTION PROVISIONS OF SECTION XVI OF THIS DECREE (INCLUDING CIRCUMSTANCES WHERE MODIFICATIONS

REQUESTED BY THE UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB). DDC SHALL

IMPLEMENT THE PLAN AS APPROVED.

79. DDC SHALL SEND TO THE UNITED STATES A COPY OF ALL WRITTEN COMMUNICATIONS DIRECTED TO 5 OR

MORE PERSONS WHICH RELATE TO THE LOW NOX REBUILD PLAN DIRECTED BY DDC TO ENGINE REBUILDERS AND

OTHER PERSONS WHO ARE TO INSTALL LOW NOX REBUILD KITS UNDER THE LOW NOX REBUILD PLAN. SUCH COPIES

SHALL BE MAILED TO THE UNITED STATES CONTEMPORANEOUSLY WITH THEIR FIRST TRANSMISSION TO ENGINE

REBUILDERS AND OTHER PERSONS WHO ARE TO INSTALL LOW NOX REBUILD KITS UNDER THE LOW NOX REBUILD

PLAN.

80. DDC SHALL PROVIDE FOR THE ESTABLISHMENT AND MAINTENANCE OF RECORDS TO ENABLE THE

PARTIES TO MONITOR THE IMPLEMENTATION OF THE LOW NOX REBUILD PROGRAM. THE RECORDS SHALL INCLUDE

THE FOLLOWING:

(A) THE NUMBER OF ENGINES THAT WILL BE SUBJECT TO LOW NOX REBUILD; AND

(B) A CUMULATIVE TOTAL OF THE NUMBER OF LOW NOX REBUILD KITS SOLD, BY PART NUMBER.

81. DDC SHALL MAINTAIN IN A FORM SUITABLE FOR INSPECTION, SUCH AS COMPUTER INFORMATION

STORAGE DEVICES OR CARD FILES, LISTS OF THE NAMES AND ADDRESSES OF ENGINE REBUILDERS WHO WERE PROVIDED

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LOW NOX REBUILD KITS AND THE NUMBER OF KITS PROVIDED. THE RECORDS DESCRIBED IN THIS PARAGRAPH SHALL

BE MADE AVAILABLE TO THE UNITED STATES UPON REQUEST.

82. THE RECORDS REQUIRED BY THIS SECTION SHALL BE RETAINED IN ACCORDANCE WITH THE

PROVISIONS OF PARAGRAPH 142 (RECORD RETENTION) OF THIS CONSENT DECREE. DDC'S OBLIGATIONS UNDER

SECTION IX.B SHALL TERMINATE TEN (10) YEARS FROM THE DATE OF INTRODUCTION OF THE FIRST LOW NOX

REBUILD KIT PURSUANT TO PARAGRAPH 68(I). DDC ACCEPTS AS A CONDITION OF SUCH TERMINATION THAT, AFTER

TERMINATION, DDC WILL ONLY MAKE AVAILABLE FOR ENGINE REBUILDS ON LOW NOX REBUILD ENGINES THE

SOFTWARE AND/OR MINOR HARDWARE THAT CORRESPONDS TO THE LOW NOX REBUILD KIT DESCRIBED IN

PARAGRAPHS 64 THROUGH 67 AND THAT COMPLIES WITH PARAGRAPHS 70 AND 73.

C. ADDITIONAL INJUNCTIVE RELIEF/OFFSET PROJECTS

83. AS FURTHER INJUNCTIVE RELIEF, DDC SHALL IMPLEMENT OR PERFORM, IN ACCORDANCE WITH THE

PROVISIONS OF THIS SECTION, PROJECTS TO REDUCE THE AMOUNT OF NOX EMITTED INTO THE ENVIRONMENT

NATIONWIDE FROM MOBILE AND STATIONARY SOURCES. SUBJECT TO THE PROVISIONS OF PARAGRAPH 84, DDC SHALL

BE OBLIGATED TO SPEND TWELVE MILLION DOLLARS ($12,000,000) FOR PERFORMANCE OF THESE PROJECTS.

84. DDC MAY SATISFY UP TO FIVE MILLION DOLLARS ($5,000,000) OF ITS OBLIGATION UNDER PARAGRAPH

83 THROUGH PROJECTS (REFERRED TO BELOW AS “INCENTIVE PROJECTS”) TO ACHIEVE REDUCTIONS IN NOX

EMISSIONS FROM HDDES MANUFACTURED BY DDC, BEYOND THOSE REQUIRED BY LAW OR BY OTHER PROVISIONS OF

THIS CONSENT DECREE, UP TO 450,000 TONS OF NOX. FOR EXAMPLE, DDC MAY SATISFY A PORTION OF ITS OFFSET

OBLIGATION UNDER PARAGRAPH 83 BY REDUCING EMISSIONS FROM PRE-SETTLEMENT ENGINES, OTHER THAN LOW

NOX REBUILD ENGINES, WITH THE VEHICLE OWNERS’ CONSENT, AT THE TIME THE ENGINES ARE BROUGHT IN FOR

SERVICE. ANY EMISSION REDUCTIONS USED IN THE INCENTIVE PROJECTS SHALL NOT BE USED TO SATISFY ANY OTHER

CONSENT DECREE OBLIGATIONS OR IN THE A,B&T PROGRAM. DDC SHALL BE ENTITLED TO A THE DOLLAR

REDUCTIONS IN ITS OBLIGATION UNDER PARAGRAPH 83 IN ACCORDANCE WITH THE FOLLOWING THRESHOLDS: (I) DDC

SHALL BE ENTITLED TO A REDUCTION OF TWO MILLION DOLLARS ($2,000,000) ONLY AFTER DDC HAS TAKEN ACTION

SUFFICIENT TO PROVIDE A FUTURE NOX EMISSIONS REDUCTION OF 180,000 TONS; (II) DDC SHALL BE ENTITLED TO AN

ADDITIONAL REDUCTION OF ONE MILLION DOLLARS ($1,000,000) ONLY AFTER DDC HAS TAKEN FURTHER ACTION

SUFFICIENT TO PROVIDE A FUTURE ADDITIONAL NOX EMISSIONS REDUCTION OF 90,000 TONS; AND (III) DDC SHALL BE

ENTITLED TO ADDITIONAL DOLLAR REDUCTIONS BASED ON ACTIONS SUFFICIENT TO PROVIDE FUTURE NOX

REDUCTIONS IN ANY INCREMENTS THAT DDC MAY DETERMINE, UP TO A MAXIMUM TOTAL DOLLAR REDUCTION OF FIVE

MILLION DOLLARS ($5,000,000).

85. DDC’S OBLIGATION UNDER PARAGRAPH 83 NET OF ANY REDUCTION IT ELECTS TO PURSUE THROUGH

INCENTIVE PROJECTS UNDER PARAGRAPH 84 (THE “NET PROJECT FUNDS”) SHALL BE SATISFIED AS FOLLOWS:

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(A) 20% OF THE NET PROJECT FUNDS SHALL BE SPENT ON THE PROJECTS AGREED TO IN, OR SELECTED

PURSUANT TO, THE CALIFORNIA SETTLEMENT AGREEMENT WITH RESPECT TO DDC’S CALIFORNIA PRE-SETTLEMENT

AND INTERIM ENGINES. DDC’S SATISFACTION OF ITS OBLIGATIONS UNDER THE CALIFORNIA SETTLEMENT

AGREEMENT WITH RESPECT TO THIS 20% OF THE NET PROJECT FUNDS SHALL FULLY SATISFY ITS OBLIGATION TO THE

UNITED STATES UNDER THIS CONSENT DECREE WITH RESPECT TO SUCH AMOUNT.

(B) 25% OF THE NET PROJECT FUNDS SHALL BE SPENT ON PROJECTS TO BE PROPOSED BY DDC CONSISTENT

WITH THE CRITERIA SET FORTH IN PARAGRAPH 89, AFTER GIVING DUE CONSIDERATION TO PROJECTS SUBMITTED BY

THIRD PARTIES DURING THE PUBLIC COMMENT PERIOD UNDER PARAGRAPH 149 OF THIS CONSENT DECREE (THE

“COMPANY PROPOSED PROJECTS”).

(C) 55% OF THE NET PROJECT FUNDS SHALL BE SPENT ON THE PROJECTS SET FORTH IN APPENDIX E TO THIS

CONSENT DECREE (THE “APPENDIX E PROJECTS”).

86. WITHIN 120 DAYS OF ENTRY OF THIS DECREE, DDC, IF IT CHOOSES TO PERFORM INCENTIVE PROJECTS,

SHALL SUBMIT TO THE UNITED STATES AND CARB, FOR REVIEW AND APPROVAL BY EACH, A SINGLE PLAN FOR THE

PERFORMANCE OR IMPLEMENTATION OF ITS INCENTIVE PROJECTS. WITHIN 120 DAYS OF ENTRY OF THIS DECREE,

DDC SHALL SUBMIT TO THE UNITED STATES A PLAN FOR PERFORMANCE OR IMPLEMENTATION OF ITS COMPANY

PROPOSED PROJECTS AND ITS APPENDIX E PROJECTS (COLLECTIVELY, THE PLANS REQUIRED TO BE SUBMITTED

PURSUANT TO THIS PARAGRAPH ARE REFERRED TO AS “THE PLANS”). THE PLANS SHALL INCLUDE A GENERAL

DESCRIPTION OF EACH PROJECT DDC PROPOSES TO PERFORM OR IMPLEMENT, INCLUDING THE TIMETABLE FOR

IMPLEMENTATION OF EACH PROJECT AND AN ESTIMATE OF THE EMISSION REDUCTIONS THAT EACH PROJECT WILL

ACHIEVE. DDC SHALL INCLUDE IN THE PLANS THE AMOUNT OF MONEY TO BE SPENT ON THE COMPANY PROPOSED

PROJECTS AND APPENDIX E PROJECTS. EACH DATE FOR COMMENCEMENT OF A PROJECT SHALL BE THE EARLIEST

PRACTICABLE, GIVEN THE NATURE OF THE PROJECT, AFTER THE UNITED STATES’ APPROVAL OF THE SCOPE OF WORK

IN ACCORDANCE WITH PARAGRAPH 92.

87. THE INCENTIVE PROJECTS SHALL BE COMPLETED NO LATER THAN SIX YEARS AFTER ENTRY OF THIS

CONSENT DECREE. ALL COMPANY PROPOSED PROJECTS AND APPENDIX E PROJECTS SHALL BE COMPLETED NO LATER

THAN EIGHT YEARS AFTER ENTRY OF THE CONSENT DECREE.

88. DDC’S MONITORING, ADMINISTRATIVE, OR OVERHEAD COSTS ASSOCIATED WITH THE IMPLEMENTATION

OF ANY COMPANY PROPOSED PROJECTS OR APPENDIX E PROJECTS SHALL NOT BE INCLUDED IN THE AMOUNTS SPENT

ON THE PROJECTS, EXCEPT TO THE EXTENT SUCH COSTS WOULD BE DEEMED REASONABLE, ALLOCABLE, AND

ALLOWABLE UNDER 48 C.F.R. PART 31, SUBPART 31.2.

89. ANY COMPANY PROPOSED PROJECTS SHALL BE CONSISTENT WITH THE FOLLOWING PRIORITIES AND

SHALL MEET THE FOLLOWING CRITERIA:

PRIORITIES:

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(A) PROJECTS PROVIDING THE GREATEST AMOUNT OF NOX EMISSION REDUCTIONS THAT ARE READILY

QUANTIFIABLE, VERIFIABLE, AND COST EFFECTIVE;

(B) PROJECTS PROVIDING SUCH EMISSION REDUCTIONS IN THE NEAR-TERM;

(C) PROJECTS THAT WILL LEVERAGE THE USE OF FUNDS FROM OTHER SOURCES;

(D) PROJECTS THAT WILL REDUCE NOX IN THOSE AREAS MOST SEVERELY AFFECTED BY OZONE AND

ACID DEPOSITION; AND

(E) PROJECTS THAT WILL FOCUS ON HEAVY-DUTY ENGINES, UNLESS OTHER NOX REDUCTION

OPPORTUNITIES ARE SHOWN TO BE MORE COST-EFFECTIVE AND EFFICIENT.

(F) PROJECTS PROVIDING THE GREATEST AMOUNT OF PM REDUCTIONS THAT ARE READILY

QUANTIFIABLE, VERIFIABLE, AND COST EFFECTIVE;

CRITERIA:

(A) THE PROJECT MAY NOT BE FOR EMISSION REDUCTION OBLIGATIONS ALREADY PLACED ON DDC

UNDER ANY FEDERAL, STATE OR LOCAL LAW OR WHICH HAVE BEEN PROPOSED FOR ADOPTION AS A MANDATORY

FEDERAL, STATE, OR LOCAL PROGRAM;

(B) THE PROJECT MAY NOT DUPLICATE PROGRAMS ALREADY FUNDED BY THE UNITED STATES OR THAT

THE UNITED STATES IS REQUIRED BY STATUTE TO PERFORM;

(C) IF IT IS A RESEARCH AND DEVELOPMENT PROJECT, THE PROJECT SHALL DEMONSTRATE

TECHNOLOGIES HAVING THE GOAL OF REDUCING HDDE NOX PLUS NMHC EMISSIONS BELOW 1.5 G/BHP-HR AND/OR

PM EMISSIONS BELOW .05 G/BHP-HR AND HAVING THE GREATEST LIKELIHOOD OF RESULTING IN MAXIMUM LONG-TERM

NOX OR PM REDUCTIONS. THE RESULTS OF SUCH RESEARCH PROGRAMS SHALL BE REPORTED ANNUALLY AND SHALL

NOT BE CONSIDERED CONFIDENTIAL BUSINESS INFORMATION;

(D) THE PROJECT SHOULD HAVE BROAD IMPACT OR SHOULD ADDRESS AREAS SIGNIFICANTLY AFFECTED

BY OZONE AND ACID DEPOSITION; AND

(E) THE PROJECT MUST BE ONE DDC WOULD NOT OTHERWISE BE LEGALLY REQUIRED TO PERFORM

OUTSIDE OF THIS CONSENT DECREE OR ONE PREVIOUSLY PLANNED BY DDC. FOR THIS PURPOSE, A PROJECT SHALL BE

DEEMED TO HAVE BEEN PREVIOUSLY PLANNED BY DDC IF THE PROJECT IS REFLECTED IN A WRITTEN PLAN APPROVED

BY MANAGEMENT ON OR BEFORE FEBRUARY 1, 1998.

90. THE UNITED STATES SHALL, WITHIN 30 DAYS, REVIEW AND EITHER DISAPPROVE OR APPROVE THE PLANS.

IF THE UNITED STATES DISAPPROVES ANY OF THE PLANS, IN WHOLE OR IN PART, IT SHALL PROVIDE DDC WITH

PROPOSED MODIFICATIONS, AND DDC SHALL HAVE 30 DAYS TO SUBMIT A REVISED VERSION OF THE DISAPPROVED

PLAN(S) TO THE UNITED STATES INCORPORATING THE UNITED STATES’ PROPOSED MODIFICATIONS; BUT, IF DDC

DISPUTES THE PROPOSED MODIFICATIONS, THE DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS

OF SECTION XVI. WITH RESPECT TO THE INCENTIVE PROJECT PLAN(S), IF THE MODIFICATIONS REQUESTED BY THE

UNITED STATES CONFLICT WITH MODIFICATIONS REQUESTED BY CARB, THE DISPUTE SHALL BE GOVERNED BY THE

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DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. IN REVIEWING DDC’S COMPANY PROPOSED PROJECTS PLAN,

THE UNITED STATES MAY CONSIDER, IN ADDITION TO THE PRIORITIES AND CRITERIA SET FORTH ABOVE, WHETHER THE

PROPOSED PROJECTS, WHEN VIEWED TOGETHER WITH THE PROPOSALS OF THE OTHER SETTLING HDDE

MANUFACTURERS, WILL ACHIEVE MAXIMUM ENVIRONMENTAL BENEFIT IN TERMS OF NOX AND PM REDUCTIONS

NATIONWIDE, AND ARE COST-EFFECTIVE IN TERMS OF EXPECTED NOX AND PM REDUCTIONS.

91. WITHIN 90 DAYS OF THE UNITED STATES’ APPROVAL OF EACH OF THE PLANS, OR RESOLUTION OF ANY

DISPUTE BY THE COURT, DDC SHALL SUBMIT A SCOPE OF WORK FOR EACH PROJECT IN EACH APPROVED PLAN,

INCLUDING THE MANNER IN WHICH IT WILL BE IMPLEMENTED, THE TIMETABLE FOR IMPLEMENTATION, THE EXPECTED

REDUCTIONS IN THE EMISSION OF AIR POLLUTANTS, THE LOCATION IN WHICH EACH PROJECT WILL BE PERFORMED OR IN

WHICH THE NOX REDUCTIONS ARE LIKELY TO OCCUR, AND ANY ISSUE THAT MUST BE RESOLVED FOR THE PROJECT TO

BE SUCCESSFUL. WITH RESPECT TO ANY INCENTIVE PROJECT, DDC SHALL SUBMIT TO THE UNITED STATES AND

CARB, FOR REVIEW AND APPROVAL BY EACH, A SINGLE SCOPE OF WORK.

92. THE UNITED STATES SHALL REVIEW AND APPROVE OR DISAPPROVE EACH PROPOSED SCOPE OF WORK

SUBMITTED UNDER PARAGRAPH 91 WITHIN 30 DAYS OF RECEIVING IT. IF A SCOPE OF WORK IS DISAPPROVED, THE

UNITED STATES SHALL PROVIDE DDC WITH AN EXPLANATION AS TO WHY IT IS BEING DISAPPROVED ALONG WITH

PROPOSED MODIFICATIONS. DDC SHALL INCORPORATE THE PROPOSED MODIFICATIONS WITHIN 30 DAYS OF RECEIVING

THE PROPOSED MODIFICATIONS; BUT, IF DDC DISPUTES THE PROPOSED MODIFICATIONS, THE DISPUTE SHALL BE

GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI. WITH RESPECT TO THE SCOPE OF WORK FOR

EACH INCENTIVE PROJECT, IF THE MODIFICATIONS REQUESTED BY THE UNITED STATES CONFLICT WITH

MODIFICATIONS REQUESTED BY CARB, THE DISPUTE SHALL BE GOVERNED BY THE DISPUTE RESOLUTION PROVISIONS

OF SECTION XVI.

93. FOLLOWING THE UNITED STATES’ APPROVAL OF EACH SCOPE OF WORK, DDC SHALL COMMENCE

IMPLEMENTATION OF THE PROJECT COVERED BY THAT SCOPE OF WORK BY THE DATE SET OUT IN THE SCOPE OF WORK

AND SHALL COMPLY WITH THE IMPLEMENTATION SCHEDULE SET FORTH IN THE SCOPE OF WORK. DDC SHALL BE

GRANTED AN EXTENSION OF THE FINAL COMPLETION DATE FOR ANY PROJECT FOR GOOD CAUSE SHOWN.

94. EACH SCOPE OF WORK SHALL PROVIDE A CERTIFICATION THAT, AS OF THE DATE THE CERTIFICATION IS

SUBMITTED, DDC IS NOT REQUIRED BY ANY FEDERAL, STATE, OR LOCAL LAW TO PERFORM OR DEVELOP ANY OF THE

PROJECTS IT PROPOSES TO IMPLEMENT OR PERFORM, NOR IS DDC REQUIRED TO PERFORM OR DEVELOP THE PROJECTS

BY ANY AGREEMENT, OTHER THAN THIS CONSENT DECREE, BY GRANT, OR AS INJUNCTIVE RELIEF IN ANY OTHER CASE.

EXCEPT AS SET FORTH IN PARAGRAPH 85, DDC SHALL FURTHER CERTIFY THAT IT HAS NOT RECEIVED, AND IS NOT

PRESENTLY NEGOTIATING TO RECEIVE, AND WILL NOT SEEK, CREDIT FOR THE PROJECTS IN ANY OTHER

ENVIRONMENTAL ENFORCEMENT PROCEEDING.

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95. THE UNITED STATES’ APPROVAL OF A PLAN OR A SCOPE OF WORK UNDER THIS SECTION SHALL NOT BE

CONSTRUED AS A PERMIT, MODIFICATION TO A PERMIT, OR DETERMINATION CONCERNING COMPLIANCE WITH ANY

LOCAL, STATE OR FEDERAL LAW.

96. DDC SHALL SUBMIT TO THE UNITED STATES A COMPLETION REPORT FOR EACH PROJECT NO LATER THAN

30 DAYS AFTER THE COMPLETION DATE. THE REPORT SHALL CONTAIN THE FOLLOWING INFORMATION:

(A) WITH RESPECT TO EACH APPROVED PROJECT: (I) A DETAILED DESCRIPTION OF THE PROJECT AS

IMPLEMENTED, INCLUDING A SUMMARY FOR PUBLIC DISCLOSURE; AND (II) CERTIFICATION THAT THE PROJECT HAS

BEEN IMPLEMENTED OR PERFORMED IN ACCORDANCE WITH THE REQUIREMENTS OF THIS CONSENT DECREE AND THE

APPLICABLE SCOPE OF WORK;

(B) WITH RESPECT TO EACH APPROVED PROJECT OF THE COMPANY PROPOSED

PROJECTS OR APPENDIX E PROJECTS: (I) A DETAILED ANALYSIS OF FULL COSTS; AND (II) A

DESCRIPTION OF THE ENVIRONMENTAL OR PUBLIC HEALTH BENEFITS RESULTING FROM

IMPLEMENTATION OF THE PROJECT (INCLUDING, WHERE APPLICABLE, AN ESTIMATION OF THE

EMISSION REDUCTION BENEFITS); AND

(C) WITH RESPECT TO EACH APPROVED PROJECT INCLUDED IN THE INCENTIVE PROJECTS, A

CERTIFICATION THAT THE EMISSION REDUCTION AMOUNTS REQUIRED UNDER PARAGRAPH 84 TO

RECEIVE THE CORRESPONDING DOLLAR REDUCTIONS IN ITS OBLIGATION UNDER PARAGRAPH 84

HAVE BEEN ACHIEVED.

97. DDC SHALL SUBMIT A REPORT AS REQUIRED BY PARAGRAPH 105 FOR ANY QUARTER IN WHICH PROJECT

IMPLEMENTATION ACTIVITIES HAVE OCCURRED, OR PROJECT EXPENDITURES ARE MADE, OR IN WHICH PROBLEMS

RELATED TO A PROJECT ARE ENCOUNTERED. SUCH REPORT SHALL INCLUDE A SUMMARY OF SUCH ACTIVITIES,

EXPENDITURES WITH RESPECT TO PROJECTS, OR PROBLEMS AND THEIR SOLUTIONS.

98. IN ITEMIZING ITS COSTS IN THE COMPLETION REPORTS FOR COMPANY PROPOSED PROJECTS AND

APPENDIX E PROJECTS, DDC SHALL CLEARLY IDENTIFY AND PROVIDE ADEQUATE DOCUMENTATION TO SUBSTANTIATE

ALL PROJECT COSTS.

99. WITHIN 30 DAYS FOLLOWING THE DATE FOR COMPLETION OF ITS INCENTIVE PROJECTS, DDC SHALL

CERTIFY TO THE UNITED STATES THAT IT HAS FULLY IMPLEMENTED ITS INCENTIVE PROJECTS AND HAS ACHIEVED ALL

THE EMISSION REDUCTIONS REQUIRED FOR THE DOLLAR REDUCTION SET FORTH IN PARAGRAPH 84. IF DDC CANNOT

MAKE THE REQUIRED CERTIFICATION, THEN ANY DOLLAR REDUCTIONS THAT DDC HAS NOT QUALIFIED TO RECEIVE

SHALL BECOME AVAILABLE FOR THE IMPLEMENTATION OF SUPPLEMENTAL OFFSET PROJECTS. TWENTY PERCENT OF

THE AVAILABLE FUNDS SHALL BE SPENT ON PROJECTS AGREED TO IN, OR SELECTED PURSUANT TO, THE CALIFORNIA

SETTLEMENT AGREEMENT, AND EIGHTY PERCENT SHALL BE SPENT ON PROJECTS APPROVED BY THE UNITED STATES IN

ACCORDANCE WITH THIS SECTION. WITHIN 120 DAYS FOLLOWING THE DEADLINE FOR COMPLETING THE INCENTIVE

PROJECTS, DDC SHALL SUBMIT A SUPPLEMENTAL OFFSET PROJECT PLAN PROPOSING PROJECTS CONSISTENT WITH THE

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PRIORITIES AND CRITERIA SET FORTH IN THIS SECTION. THE SUPPLEMENTAL OFFSET PROJECT PLAN SHALL BE SUBJECT

TO THE UNITED STATES’ REVIEW AND APPROVAL OR DISAPPROVAL IN THE SAME MANNER AS SET FORTH IN

PARAGRAPH 90 ABOVE, AND DDC SHALL SUBMIT SCOPES OF WORK AND IMPLEMENT ANY APPROVED SCOPE OF WORK

IN THE SAME MANNER AS SET FORTH IN PARAGRAPHS 92 AND 93 ABOVE, EXCEPT THAT ALL SUPPLEMENTAL OFFSET

PROJECTS SHALL BE COMPLETED WITHIN 3 YEARS FROM THE DATE OF EPA’S APPROVAL OF THE APPLICABLE SCOPE OF

WORK.

100. DURING THE TERM OF THIS CONSENT DECREE, IN ANY PREPARED PUBLIC STATEMENTS, ORAL OR

WRITTEN, MADE BY THE DDC ABOUT THE PROJECTS UNDER THIS SECTION, DDC SHALL INCLUDE THE FOLLOWING

LANGUAGE: “THIS PROJECT WAS UNDERTAKEN PURSUANT TO AN AGREEMENT WITH THE UNITED STATES IN

CONNECTION WITH SETTLEMENT OF DISPUTED CLAIMS IN AN ENFORCEMENT ACTION UNDER THE CLEAN AIR ACT.”

101. EXCEPT AS PROVIDED HEREIN, DDC SHALL NOT USE OR RELY ON THE EMISSION REDUCTIONS

GENERATED AS PART OF ANY PROJECTS UNDERTAKEN PURSUANT TO THE APPROVED SCOPE OF WORK IN ANY FEDERAL

OR STATE EMISSION AVERAGING, BANKING, TRADING OR OTHER EMISSION COMPLIANCE PROGRAM. IF DDC PROPOSES

TO IMPLEMENT A PROJECT TO RESEARCH AND DEVELOP NEW TECHNOLOGY OR NEW FUELS, THE PROJECT MUST

INCLUDE A FIELD DEMONSTRATION OF THE TECHNOLOGY, IF PRACTICABLE. NO EMISSION REDUCTIONS GENERATED BY

THE ENGINES REQUIRED BY THE PROJECT MAY BE USED OR RELIED ON FOR PURPOSES OF FEDERAL OR STATE EMISSION

AVERAGING, BANKING, TRADING, OR OTHER EMISSION COMPLIANCE PROGRAMS. HOWEVER, IF DDC THEREAFTER

EMPLOYS THAT TECHNOLOGY IN ENGINES OTHER THAN THOSE SPECIFICALLY REQUIRED BY THE PROJECT, NOTHING

HEREIN SHALL PROHIBIT THE USE OF THE CREDITS GENERATED FROM THE ADDITIONAL VEHICLES IN FEDERAL OR STATE

EMISSION AVERAGING, BANKING, TRADING, OR OTHER EMISSION COMPLIANCE PROGRAMS.

101A. APART FROM THE PROJECTS DISCUSSED IN PARAGRAPHS 83-101, ABOVE, DDC AGREES THAT IT WILL

SPEND AT LEAST $55,000,000 ( MILLION DOLLARS) FOR RESEARCH AND DEVELOPMENT AND CAPITAL EXPENDITURES

FROM JULY 1, 1998 THROUGH JUNE 30, 2003 TO ACHIEVE COMPLIANCE WITH A NOX PLUS NMHC EMISSIONS

STANDARD OF 2.5 G/BHP-HR OR LOWER AND OTHER APPLICABLE EMISSIONS STANDARDS. EXPENDITURE OF THESE

SUMS DOES NOT RELIEVE DDC OF ITS OBLIGATION TO COMPLY WITH ALL REQUIREMENTS OF THIS CONSENT DECREE.

X.ADDITIONAL DATA ACCESS, MONITORING, AND REPORTING

REQUIREMENTS

A. ACCESS TO ENGINE CONTROL MODULE DATA

102. WITHIN 90 DAYS AFTER THE DATE OF ENTRY OF THIS CONSENT DECREE, DDC SHALL PROVIDE EPA

WITH CURRENT DECODER TOOLS, PASSWORDS, AND ANY OTHER DEVICE OR INFORMATION REQUIRED TO OBTAIN

ACCESS TO DATA FROM DDC’S HDDES NECESSARY TO DETERMINE REPORTED OUTPUT TORQUE FROM AN ENGINE.

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THEREAFTER, DDC SHALL PROVIDE EPA WITH ANY MODIFIED TOOL OR DEVICE AND ANY CHANGED INFORMATION

PROMPTLY AFTER ANY MODIFICATION OR CHANGE IS MADE, SO AS TO ENSURE EPA’S CONTINUING CAPABILITY TO

ACCESS SUCH DATA. AT THE TIME THAT DDC PROVIDES TO EPA ANY DEVICE OR INFORMATION REQUIRED BY THIS

PARAGRAPH, DDC MAY DESIGNATE ALL OR A PORTION OF THE INFORMATION PROVIDED TO EPA, OR OBTAINABLE BY

EPA THROUGH THE USE OF THE DEVICE OR INFORMATION PROVIDED DIRECTLY, AS CONFIDENTIAL BUSINESS

INFORMATION IN ACCORDANCE WITH 40 C.F.R. PART 2.

103. BEGINNING WITH MODEL YEAR 2000 ENGINES, DDC SHALL CONFIGURE THE ENGINE CONTROL

MODULES INSTALLED ON HDDES MANUFACTURED BY DDC TO CALCULATE AND REPORT ENGINE OUTPUT TORQUE (IN

FT-LB), ENGINE SPEED (IN RPM), AND COMMANDED FUEL INJECTION TIMING (IN DEGREES BEFORE TOP DEAD CENTER

(“DBTDC”)) AT A MINIMUM UPDATE RATE OF 5 HZ. SUBJECT TO THE PHASE-IN PROVISIONS OF THIS PARAGRAPH,

DDC SHALL DEMONSTRATE TO THE HIGHEST DEGREE OF PRECISION AND ACCURACY ACHIEVABLE CONSISTENT WITH

GOOD ENGINEERING PRACTICES AT THE TIME OF CERTIFICATION THAT: (A) THE REPORTED OUTPUT TORQUE IS EQUAL TO

ACTUAL OUTPUT TORQUE; (B) THE REPORTED OUTPUT RPM IS EQUAL TO ACTUAL ENGINE RPM; AND (C) THE

COMMANDED INJECTION TIMING IS EQUAL TO ACTUAL COMMANDED INJECTION TIMING IN DBTDC. THE OBLIGATION

TO MAKE A DEMONSTRATION WITH RESPECT TO REPORTED OUTPUT TORQUE IMPOSED BY THIS PARAGRAPH SHALL BE

PHASED IN AS FOLLOWS: BEGINNING WITH MODEL YEAR 2000, AT LEAST 25% OF THE TOTAL VOLUME OF HDDES

MANUFACTURED BY DDC SHALL BE CONFIGURED TO PROVIDE REPORTED OUTPUT TORQUE TO THE DEGREE OF

PRECISION AND ACCURACY ESTABLISHED PURSUANT TO THIS PARAGRAPH; AND BEGINNING IN MODEL YEAR 2001, ALL

HDDES MANUFACTURED BY DDC SHALL BE SO CONFIGURED. ALL OF THE REQUIRED DATA OUTPUTS SPECIFIED

ABOVE SHALL BE MADE COMPATIBLE WITH INDUSTRY STANDARD DATA LINKS.

B. COMPLIANCE REPRESENTATIVE

104. WITHIN 15 DAYS OF ENTRY OF THIS CONSENT DECREE, DDC SHALL DESIGNATE A DULY AUTHORIZED

REPRESENTATIVE WHOSE RESPONSIBILITY SHALL BE TO OVERSEE DDC’S PROGRAM FOR IMPLEMENTATION OF THE

MEASURES SPECIFIED IN SECTION VI (REQUIREMENTS FOR ON-ROAD HDDES), SECTION VI-A (REQUIREMENTS FOR

NONROAD CI ENGINES), SECTION VIII.B (IN-USE TESTING REQUIREMENTS), SECTION IX (ADDITIONAL INJUNCTIVE

RELIEF), AND TO FILE SUCH REPORTS AND CERTIFICATIONS AS ARE REQUIRED UNDER THIS CONSENT DECREE. THIS

PERSON MAY NOT BE THE SAME INDIVIDUAL AS DDC’S COMPLIANCE AUDITOR. THE DESIGNATED REPRESENTATIVE

SHALL ALSO ATTEND THE PROGRESS MEETINGS AMONG THE PARTIES AS PROVIDED FOR IN PARAGRAPH 106, AND SHALL

BE RESPONSIBLE FOR PROVIDING ALL ADDITIONAL INFORMATION AND DOCUMENTATION REQUESTED BY THE UNITED

STATES IN ACCORDANCE WITH PARAGRAPH 105 OF THIS CONSENT DECREE.

C. PROGRESS REPORTING

- 38 ­

105. IN ADDITION TO ANY OTHER REQUIREMENT OF THIS CONSENT DECREE, DDC SHALL SUBMIT TO EPA

WRITTEN QUARTERLY PROGRESS REPORTS THAT: (A) DESCRIBE THE ACTIONS WHICH HAVE BEEN TAKEN TOWARD

ACHIEVING COMPLIANCE WITH THIS CONSENT DECREE DURING THE PREVIOUS QUARTER; (B) INCLUDE A SUMMARY OF

ALL RESEARCH AND DEVELOPMENT ACTIVITY, INVESTIGATORY ACTIVITY AND PROCUREMENT ACTIVITY ENGAGED IN

DURING THE QUARTER WHICH RELATES TO THE DEVELOPMENT, PROCUREMENT, OR IMPLEMENTATION OF TECHNOLOGY

TO ASSIST IN MEETING ANY OF THE COMPLIANCE OBLIGATIONS OF THIS DECREE; (C) INCLUDE THE INFORMATION

REQUIRED BY PARAGRAPHS 44, 55, 59 AND 97; (D) DESCRIBE ALL ACTIONS, INCLUDING, BUT NOT LIMITED TO, ACTIONS

RELATED TO COMPLIANCE WITH THE EURO III, NTE, TNTE, SMOKE (OR ALTERNATE OPACITY), AND NOX PLUS

NMHC LIMITS OF THIS DECREE, AND ACTIONS RELATED TO IMPLEMENTATION OF THE SECTION IX.C REQUIREMENTS,

AND THE IN-USE TESTING PROGRAM; (E) INCLUDE THE CURRENT RUNNING TOTAL OF LOW NOX REBUILD KITS

PROVIDED TO ENGINE REBUILDERS; AND (F) INCLUDE A SUMMARY OF ALL TESTS CONDUCTED IN ORDER TO COMPLY

WITH THE REQUIREMENTS OF THIS CONSENT DECREE, WITH DOCUMENTATION FOR SUCH TESTS BEING MADE

AVAILABLE BY DDC TO THE UNITED STATES UPON REQUEST. DDC MAY DESIGNATE ALL OR A PORTION OF A REPORT

AS CONFIDENTIAL BUSINESS INFORMATION IN ACCORDANCE WITH 40 C.F.R. PART 2.

106. DDC SHALL SUBMIT AN INITIAL PROGRESS REPORT TO EPA WITHIN 45 DAYS OF THE CLOSE OF THE

QUARTER DURING WHICH THIS CONSENT DECREE IS ENTERED AND WITHIN 30 DAYS OF THE CLOSE OF EACH QUARTER

THEREAFTER, THROUGH AND INCLUDING THE QUARTER IN WHICH THIS CONSENT DECREE IS TERMINATED PURSUANT

TO SECTION XXVI OF THIS CONSENT DECREE, CONTAINING THE INFORMATION REQUIRED BY PARAGRAPH 105. IF

REQUESTED BY THE UNITED STATES, DDC SHALL PROVIDE BRIEFINGS FOR THE UNITED STATES TO DISCUSS THE

PROGRESS OF IMPLEMENTATION OF THIS CONSENT DECREE.

107. EACH NOTICE, SUBMISSION, OR REPORT REQUIRED BY THIS CONSENT DECREE, EXCEPT FOR ANY REPORT

REQUIRED TO BE SUBMITTED BY THE COMPLIANCE AUDITOR, SHALL CONTAIN THE FOLLOWING STATEMENT SIGNED BY

A RESPONSIBLE CORPORATE OFFICIAL: “TO THE BEST OF MY KNOWLEDGE, AFTER THOROUGH INVESTIGATION, I

CERTIFY THAT THE INFORMATION CONTAINED IN OR ACCOMPANYING THIS SUBMISSION IS TRUE, ACCURATE AND

COMPLETE. I AM AWARE THAT THERE ARE SIGNIFICANT PENALTIES FOR KNOWINGLY SUBMITTING FALSE INFORMATION,

INCLUDING THE POSSIBILITY OF FINES AND IMPRISONMENT FOR KNOWING VIOLATIONS.” EACH NOTICE, SUBMISSION OR

REPORT SHALL BE ACCOMPANIED BY A TRANSMITTAL LETTER REFERENCING THE APPROPRIATE PARAGRAPH OF THIS

CONSENT DECREE. DDC SHALL NOT OBJECT TO THE ADMISSIBILITY IN EVIDENCE OF ANY SUCH NOTICE, SUBMISSION,

OR REPORTS, EXCEPT ON THE GROUNDS OF RELEVANCY, IN ANY PROCEEDING TO ENFORCE THIS CONSENT DECREE.

108. COMPLIANCE WITH THE REPORTING REQUIREMENTS OF THIS CONSENT DECREE SHALL NOT RELIEVE

DDC OF ITS OBLIGATION TO COMPLY WITH ANY OTHER REPORTING REQUIREMENTS IMPOSED BY ANY APPLICABLE

FEDERAL, STATE, OR LOCAL LAWS, REGULATION, OR PERMIT.

- 39 ­

XI.NON-CIRCUMVENTION PROVISIONS

109. DDC SHALL NOT, DIRECTLY OR INDIRECTLY THROUGH ITS DEALERS, DISTRIBUTORS, OR OTHER THIRD

PARTIES (INCLUDING ANY PRESENT OR FUTURE MANUFACTURER OF HDDES OR NONROAD CI ENGINES), CIRCUMVENT

THE REQUIREMENTS OF THIS CONSENT DECREE THROUGH LEASING, LICENSING, SALES, OR OTHER ARRANGEMENTS, OR

THROUGH STOCKPILING (I.E., BUILD UP OF AN INVENTORY OF ENGINES OUTSIDE NORMAL BUSINESS PRACTICES BEFORE

A NEW LIMIT UNDER THIS CONSENT DECREE TAKES EFFECT).

110. ALL HDDES AND NONROAD CI ENGINES MANUFACTURED AT ANY FACILITY OWNED OR OPERATED BY DDC ON OR AFTER

JANUARY 1, 1998, FOR WHICH A CERTIFICATE OF CONFORMITY IS SOUGHT, MUST MEET ALL APPLICABLE

REQUIREMENTS OF THIS DECREE, REGARDLESS OF WHETHER DDC STILL OWNED, OWNS, OPERATED, OR OPERATES

THAT FACILITY AT THE TIME THE ENGINE IS MANUFACTURED.

XII.NOTICE AND SUBMITTALS

111. WHENEVER, UNDER THE TERMS OF THIS CONSENT DECREE, A NOTICE, SUBMISSION, REPORT, OR OTHER

DOCUMENT IS REQUIRED TO BE SENT BY ONE PARTY TO ANOTHER, IT SHALL BE DIRECTED TO THE INDIVIDUALS AT THE

ADDRESSES SPECIFIED BELOW, UNLESS THOSE INDIVIDUALS OR THEIR SUCCESSORS GIVE NOTICE OF A CHANGE TO THE

OTHER PARTY IN WRITING. ALL NOTICES AND SUBMISSIONS SHALL BE CONSIDERED EFFECTIVE UPON RECEIPT, UNLESS

OTHERWISE PROVIDED.

SUCH NOTICE SHALL BE SENT TO THE PARTIES AS FOLLOWS:

AS TO THE UNITED STATES:

CHIEF

ENVIRONMENTAL ENFORCEMENT SECTION

ENVIRONMENT AND NATURAL RESOURCES DIVISION

U.S. DEPARTMENT OF JUSTICE

P.O. BOX 7611, BEN FRANKLIN STATION

WASHINGTON, D.C. 20044

AND

DIRECTOR, AIR ENFORCEMENT DIVISION (2242A)

U.S. ENVIRONMENTAL PROTECTION AGENCY

401 M STREET, S.W.

WASHINGTON, D.C. 20460

- 40 ­

AS TO DDC:

DETROIT DIESEL CORPORATION

13400 OUTER DRIVE WEST

DETROIT, MICHIGAN 48239-4001

ATTENTION: GENERAL COUNSEL

FAX: (313) 592-7664

AND

DETROIT DIESEL CORPORATION

13400 OUTER DRIVE WEST

DETROIT, MICHIGAN 48239-4001

ATTENTION: EPA COMPLIANCE REPRESENTATIVE

AND

JONATHAN S. MARTEL

ARNOLD & PORTER

555 12TH STREET, N.W.

WASHINGTON, D.C. 20004-1202

FAX: (202) 942-5999

112. ANY PARTY MAY CHANGE THE ADDRESS FOR PROVIDING NOTICES TO IT BY SERVING ALL OTHER

ADDRESSEES IDENTIFIED ABOVE WITH A NOTICE SETTING FORTH SUCH NEW ADDRESS.

XIII. CIVIL PENALTY

113. DDC HAS AGREED TO PAY AN AGGREGATE CIVIL PENALTY OF TWELVE AND ONE-HALF MILLION DOLLARS

($12,500,000) UNDER THIS CONSENT DECREE AND THE CALIFORNIA SETTLEMENT AGREEMENT TO RESOLVE THE

FEDERAL AND STATE CLAIMS DESCRIBED IN THOSE AGREEMENTS. ACCORDINGLY, UNDER THIS CONSENT DECREE,

WITHIN 15 DAYS OF THE DATE OF ENTRY OF THIS CONSENT DECREE, DDC SHALL PAY TO THE UNITED STATES A

TOTAL OF NINE MILLION THREE HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($9,375,000) IN ONE PAYMENT, OR, AT

DDC’S OPTION, IN FOUR EQUAL INSTALLMENTS OF TWO MILLION THREE HUNDRED AND FORTY-THREE THOUSAND

SEVEN HUNDRED AND FIFTY DOLLARS ($2,343,750) PLUS INTEREST ON THE UNPAID BALANCE REMAINING AFTER THE

- 41 ­

FIRST PAYMENT AT THE PER ANNUM RATE AS SPECIFIED IN 31 U.S.C. § 3717. IF, HOWEVER, DDC’S BOARD OF

DIRECTORS APPROVES, AFTER THE DATE OF FILING: A REPURCHASE OF STOCK (EXCEPT FOR CERTAIN ISOLATED

REPURCHASES OF SMALL BLOCKS OF STOCK FROM DDC’S EMPLOYEES IN THE NORMAL COURSE OF BUSINESS AND

CONSISTENT WITH HISTORICAL PRACTICE); AN INCREASE IN DIVIDENDS; OR THE MAKING OF LOANS (EXCEPT IN THE

NORMAL COURSE OF BUSINESS AND CONSISTENT WITH HISTORICAL PRACTICE); THEN THE INTEREST RATE APPLICABLE

TO THE BALANCE DUE AT THAT TIME SHALL BE ADJUSTED TO A RATE EQUAL TO 1 PERCENT ABOVE THE OTHERWISE

APPLICABLE RATE UNDER 31 U.S.C. § 3717. IN THE EVENT DDC CHOOSES TO PAY IN INSTALLMENTS, THE FIRST

INSTALLMENT SHALL BE DUE AND PAYABLE WITHIN 25 DAYS OF THE DATE OF ENTRY WITH EACH OF THE REMAINING

THREE INSTALLMENTS DUE AND PAYABLE ON THE NEXT THREE SUCCESSIVE ANNIVERSARIES OF THE DATE OF ENTRY

ALONG WITH THE ACCRUED INTEREST ON THE UNPAID BALANCE. LATE PAYMENT OF THE CIVIL PENALTY OR ANY

INSTALLMENT THEREOF (ALONG WITH ANY ACCRUED AND UNPAID INTEREST ON ANY SUCH INSTALLMENT), SHALL BE

SUBJECT TO ADDITIONAL INTEREST AND FEES AS SPECIFIED IN 31 U.S.C. 3717.

114. PAYMENT SHALL BE MADE BY ELECTRONIC FUNDS TRANSFER BY 4:00 P.M. EASTERN STANDARD TIME

ON THE DUE DATE TO THE DEPARTMENT OF JUSTICE LOCKBOX BANK IN ACCORDANCE WITH SPECIFIC INSTRUCTIONS TO

BE PROVIDED TO DDC UPON ENTRY OF THIS CONSENT DECREE AND SHALL REFERENCE DEPARTMENT OF JUSTICE

CASE NO. 90-5-2-1-2253 AND THE CIVIL ACTION NUMBER OF THIS MATTER. DDC SHALL TRANSMIT NOTICE OF SUCH

PAYMENTS TO THE UNITED STATES.

115. PENALTY PAYMENTS MADE PURSUANT TO PARAGRAPH 113 OF THIS CONSENT DECREE ARE CIVIL

PENALTIES WITHIN THE MEANING OF SECTION 162(F) OF THE INTERNAL REVENUE CODE, 26 U.S.C. § 162(F) AND ARE

NOT TAX DEDUCTIBLE FOR THE PURPOSES OF FEDERAL LAW.

XIV. STIPULATED PENALTIES AND OTHER PAYMENTS

116. DDC SHALL PAY STIPULATED PENALTIES AND OTHER PAYMENTS TO THE UNITED STATES AS FOLLOWS:

(A) IF DDC SEEKS CERTIFICATES OF CONFORMITY FOR ANY AFFECTED HDDES, BUT CANNOT CERTIFY

COMPLIANCE WITH ANY APPLICABLE EURO III, NTE, TNTE, SMOKE (OR ALTERNATE OPACITY), OR NOX PLUS

NMHC LIMITS, OR THE NONROAD CI ENGINE STANDARD PULL-AHEAD REQUIREMENTS, DDC SHALL MAKE PAYMENTS

TO THE UNITED STATES AS FOLLOWS:

(I) FOR FAILURE TO CERTIFY TO THE APPLICABLE EURO III LIMITS FOR CO OR HC, PER

ENGINE NON-CONFORMANCE PENALTIES (“NCPS”) SHALL BE $200;

(II) FOR FAILURE TO CERTIFY TO THE APPLICABLE SMOKE OR ALTERNATE OPACITY LIMITS, PER

ENGINE NCPS SHALL BE $200;

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(III)FOR FAILURE TO CERTIFY TO THE APPLICABLE EURO III, NTE, OR TNTE LIMITS FOR NOX,

NOX PLUS NMHC, OR PM, THE NOX PLUS NMHC LIMITS, OR THE NONROAD CI ENGINE STANDARD PULL-AHEAD

REQUIREMENTS, NCPS SHALL BE CALCULATED USING THE NCP PROCEDURES, EQUATIONS, AND VALUES SPECIFIED IN

40 CFR PART 86, SUBPART L AS IF THEY WERE FAILURES OF THE REGULATORY FTP LIMIT FOR HDDES, WITH THE

FOLLOWING EXCEPTIONS:

(A) FOR HDDES MANUFACTURED PRIOR TO OCTOBER 1, 2002, THE APPLICABLE

EURO III AND NTE “UPPER LIMIT” (THE UL VALUE IN THE EQUATIONS FOUND AT 40 CFR 86.1113-87) FOR NOX

SHALL BE 1.0 G/BHP-HR PLUS THE APPLICABLE EURO III OR NTE LIMIT. FOR HDDES MANUFACTURED ON OR AFTER

OCTOBER 1, 2002, THE APPLICABLE EURO III, NTE, AND TNTE UPPER LIMIT FOR NOX PLUS NMHC SHALL BE THE

UPPER LIMIT FOR NOX PLUS NMHC FOR MODEL YEAR 2004 ENGINES SET OUT IN THE REGULATIONS MINUS 2.5 G/BHP­

HR PLUS THE EURO III, NTE OR TNTE LIMIT--I.E.,

(ULNOX + NMHC - 2.5 G/BHP-HR) + S;

HOWEVER, IF NO UPPER LIMIT IS SET BY REGULATION FOR NOX PLUS NMHC FOR MODEL YEAR 2004 ENGINES, THEN

THE APPLICABLE EURO III, NTE, AND TNTE UPPER LIMIT FOR NOX PLUS NMHC SHALL BE 1.5 G/BHP-HR PLUS THE

EURO III, NTE OR TNTE LIMIT. FOR HDDES, EXCEPT URBAN BUS ENGINES, THE APPLICABLE EURO III, NTE, AND

TNTE UPPER LIMIT FOR PM SHALL BE 0.15 G/BHP-HR PLUS THE APPLICABLE EURO III, NTE, OR TNTE LIMIT. FOR

URBAN BUS ENGINES, THE APPLICABLE EURO III, NTE, AND TNTE UPPER LIMIT FOR PM SHALL BE 0.02 G/BHP-HR

PLUS THE APPLICABLE EURO III, NTE, OR TNTE LIMIT. FOR NONROAD CI ENGINES AT OR ABOVE 750 HORSEPOWER,

THE APPLICABLE UPPER LIMIT FOR NOX PLUS NMHC SHALL BE 6.9 G/BHP-HR;

(B) FOR HDDES MANUFACTURED PRIOR TO OCTOBER 1, 2002, THE COC50, COC90,

MC50, AND F VALUES AND THE FACTOR USED TO CALCULATE THE ENGINEERING AND DEVELOPMENT COMPONENT OF

THE NCP FOR NOX SHALL BE THOSE FOUND AT 40 CFR 86.1105-87(H). FOR HDDES, EXCEPT URBAN BUS ENGINES,

THE COC50, COC90, MC50, AND F VALUES AND THE FACTOR USED TO CALCULATE THE ENGINEERING AND

DEVELOPMENT COMPONENT OF THE NCP FOR PM SHALL BE THOSE FOUND AT 40 CFR 86.1105-87(F)(2). FOR URBAN

BUS ENGINES, THE COC50, COC90, MC50, AND F VALUES AND THE FACTOR USED TO CALCULATE THE ENGINEERING

AND DEVELOPMENT COMPONENT OF THE NCP FOR PM SHALL BE THOSE FOUND AT 40 CFR 86.1105-87(G)(3).

(C) THE “S” VALUE USED IN THE EQUATIONS FOUND AT 40 CFR 86.1113-87 SHALL BE THE

APPLICABLE EMISSION LIMIT THAT IS EXCEEDED UNDER THIS DECREE;

(D) FOR PURPOSES OF CALCULATING THE ANNUAL ADJUSTMENT FACTOR (THE “AAF”

VALUES USED IN THE EQUATIONS FOUND AT 40 CFR 86.1113-87), THE FIRST MODEL FOR WHICH AN NCP SHALL BE

CONSIDERED AVAILABLE SHALL BE THE FIRST MODEL YEAR THAT AN EMISSION LIMIT IS APPLICABLE OR BECOMES

MORE STRINGENT;

(E) FOR HDDES MANUFACTURED ON OR AFTER OCTOBER 1, 2002, SUBJECT TO THE

EXCEPTIONS SPECIFIED IN PARAGRAPH 116(A), NCPS FOR FAILURE TO CERTIFY TO THE EURO III, NTE, TNTE, OR

- 43 ­

NOX PLUS NMHC EMISSION LIMITS SHALL BE CALCULATED IN ACCORDANCE WITH THE NCP PROCEDURES,

EQUATIONS AND VALUES FOUND IN 40 CFR PART 86, SUBPART L APPLICABLE TO MODEL YEAR 2004 HDDES. IF NO

COC50, COC90, MC50, AND F VALUES OR FACTORS USED TO CALCULATE THE ENGINEERING AND DEVELOPMENT

COMPONENT OF THE NCP FOR MODEL YEAR 2004 HDDES ARE ESTABLISHED BY REGULATION, THEN THE VALUES AND

FACTORS SHALL BE THOSE APPLICABLE TO THE 1998 MODEL YEAR MULTIPLIED BY 1.5. PAYMENT OF NCPS

PURSUANT TO SUBPARAGRAPH 116(A)(III)(E) WILL SATISFY ANY NCPS THAT ARE OTHERWISE OWED TO THE UNITED

STATES AS A RESULT OF A FAILURE TO CERTIFY TO THE REGULATORY FTP LIMIT FOR NOX PLUS NMHC;

(F) FOR FAILURE TO CERTIFY TO THE NONROAD CI ENGINE STANDARD PULL-AHEAD

REQUIREMENTS, SUBJECT TO THE EXCEPTIONS SPECIFIED IN PARAGRAPH 116(A), NCPS SHALL BE CALCULATED IN

ACCORDANCE WITH THE NCP PROCEDURES, EQUATIONS AND VALUES FOUND IN 40 CFR PART 86, SUBPART L

APPLICABLE TO MODEL YEAR 2004 HHDDES. IF NO COC50, COC90, MC50, AND F VALUES OR FACTORS USED TO

CALCULATE THE ENGINEERING AND DEVELOPMENT COMPONENT OF THE NCP FOR MODEL YEAR 2004 HHDDES ARE

ESTABLISHED BY REGULATION, THEN THE VALUES AND FACTORS SHALL BE THOSE APPLICABLE TO 1998 MODEL YEAR

HHDDES MULTIPLIED BY 1.3.

(G) IF THE “COMPLIANCE LEVEL” FOR AN ENGINE FAMILY EXCEEDS THE APPLICABLE UPPER

LIMIT, THEN NCPS WILL BE DETERMINED BY CALCULATING THE APPLICABLE NCP AS IF THE COMPLIANCE LEVEL WERE

EQUAL TO THE UPPER LIMIT AND THEN MULTIPLYING THE RESULTING NCP AMOUNT BY THE FOLLOWING:

1 + [.25 X (CL - UL)]

[(UL - EL)]

WHERE:

CL = THE ACTUAL COMPLIANCE LEVEL

UL = THE UPPER LIMIT

EL = THE APPLICABLE EMISSION LIMIT UNDER THIS DECREE;

(H) A SEPARATE NCP SHALL BE PAID FOR EACH POLLUTANT WHERE THERE IS A

FAILURE TO CERTIFY TO ANY EMISSION LIMIT IMPOSED BY THIS CONSENT DECREE. FOR EXAMPLE, IF A PARTICULAR

ENGINE CONFIGURATION EXCEEDS THE APPLICABLE NTE LIMIT FOR BOTH NOX AND PM, THEN DDC SHALL BE LIABLE

FOR SEPARATE NCPS BASED ON THE AMOUNTS DETERMINED UNDER THIS SUBPARAGRAPH FOR BOTH THE NOX AND

PM EXCEEDANCES OF THE NTE LIMIT. HOWEVER, IF AN ENGINE CONFIGURATION EXCEEDS MORE THAN ONE EMISSION

LIMIT UNDER THIS DECREE FOR THE SAME POLLUTANT (E.G., AN ENGINE CONFIGURATION FAILS TO MEET THE

APPLICABLE NOX LIMIT FOR BOTH THE EURO III COMPOSITE VALUE LIMIT AND THE NTE LIMIT), DDC SHALL BE

LIABLE FOR ONLY ONE NCP. TO DETERMINE THE PER ENGINE NCP WHERE AN ENGINE CONFIGURATION EXCEEDS

MULTIPLE EMISSION LIMITS FOR THE SAME POLLUTANT, DDC SHALL CALCULATE THE APPLICABLE PER ENGINE NCP IN

- 44 ­

ACCORDANCE WITH THIS SUBPARAGRAPH FOR EACH LIMIT EXCEEDED, AND THE PER ENGINE NCP SHALL BE THE ONE

RESULTING IN THE LARGEST PAYMENT;

(I) ANY DISPUTE ARISING UNDER OR RELATING TO THIS CONSENT DECREE

REGARDING WHETHER A COMPLIANCE LEVEL HAS BEEN APPROPRIATELY CALCULATED SHALL BE SUBJECT TO THE

ADMINISTRATIVE HEARING PROCEDURES FOUND AT 40 CFR 86.1115-87. HOWEVER, ANY APPEAL OF A FINAL DECISION

BY THE ENVIRONMENTAL APPEALS BOARD SHALL NOT BE SUBJECT TO THE PROVISIONS OF SECTION 307 OF THE ACT,

42 U.S.C. § 7607, BUT INSTEAD SHALL BE RESOLVED THROUGH THE DISPUTE RESOLUTION PROCEDURES IN SECTION

XVI OF THIS CONSENT DECREE. FOR ANY HEARING UNDER SUBPARAGRAPH 116(A)(III)(I), EPA SHALL APPOINT A

HEARING OFFICER WHO SHALL PRESIDE AT ANY HEARING AT WHICH, UNDER EXISTING REGULATIONS, AN

ADMINISTRATIVE LAW JUDGE WOULD OTHERWISE PRESIDE; AND,

(J) PAYMENT OF NCPS UNDER THIS SUBPARAGRAPH SHALL BE MADE IN

ACCORDANCE WITH THE PROCEDURES FOUND AT 40 CFR 86.1113-87(G), EXCEPT THAT THE QUARTERLY PAYMENTS

SHALL BE PAYABLE TO THE “TREASURER, UNITED STATES OF AMERICA,” AND SENT TO THE OFFICE OF THE UNITED

STATES ATTORNEY FOR THE DISTRICT OF COLUMBIA, REFERENCING THE CIVIL ACTION NUMBER OF THIS MATTER. A

COPY OF THE TRANSMITTAL LETTER AND CHECK AND THE INFORMATION REQUIRED TO BE SUBMITTED QUARTERLY TO

EPA PURSUANT TO 40 CFR 86.1113-87(G)(3) SHALL BE SENT TO THE UNITED STATES.

(B) IN-USE COMPLIANCE. THIS SUBPARAGRAPH (B) APPLIES ONLY TO HDDES INSTALLED IN VEHICLES

AND INTRODUCED INTO COMMERCE. THE STIPULATED PENALTIES SET FORTH IN SUBPARAGRAPH (B) APPLY ONLY TO

ENGINES MANUFACTURED ON OR AFTER JANUARY 1, 2000, AND ONLY TO NOX OR NOX PLUS NMHC VIOLATIONS OF

THE EURO III, NTE, TNTE, AND NOX PLUS NMHC LIMITS AND REQUIREMENTS SET FORTH IN THIS CONSENT

DECREE. STIPULATED PENALTIES MAY BE ASSESSED ONLY ONCE UNDER SUBPARAGRAPH (B)(I) AND ONCE UNDER

(B)(II) FOR AN AFFECTED POPULATION OF ENGINES, UNLESS THE SUBSEQUENT EMISSIONS EXCEEDANCE IS THE RESULT

OF A SEPARATE, PREVIOUSLY UNIDENTIFIED CAUSE. IN EVALUATING THE SCOPE OF THE AFFECTED POPULATION FOR

PURPOSES OF THIS SECTION, THERE SHALL BE A REBUTTABLE PRESUMPTION THAT THE AFFECTED POPULATION IS THE

ENGINE FAMILY TO WHICH THE TESTED ENGINES BELONG. NO ENGINE MAY BE USED TO ESTABLISH THE EXISTENCE OF

AN EMISSIONS EXCEEDANCE IF THE ENGINE OR VEHICLE IN WHICH IT WAS INSTALLED WAS SUBJECT TO ABUSE OR

IMPROPER MAINTENANCE OR OPERATION, OR IF THE ENGINE WAS IMPROPERLY INSTALLED, AND SUCH ACTS OR

OMISSIONS CAUSED THE EXCEEDANCE.

(I) THE STIPULATED PENALTIES SET FORTH IN THIS SUBPARAGRAPH APPLY WHEN A POPULATION OF

ENGINES, IN-USE, EXCEEDS AN APPLICABLE EMISSION LIMIT BY 0.5 G/BHP-HR OR MORE. FOR PURPOSES OF THIS

SUBPARAGRAPH, THE “EMISSIONS THRESHOLD” SHALL MEAN (A) FOR A TEST USING VEHICLE TEST EQUIPMENT (E.G.,

AN OVER-THE-ROAD MOBILE MONITORING DEVICE SUCH AS “ROVER”, OR A CHASSIS DYNAMOMETER), THE

APPLICABLE MAXIMUM NOX EMISSION LIMIT PLUS THE GREATER OF 0.5 G/BHP-HR OR ONE STANDARD DEVIATION OF

- 45 ­

THE DATA SET ESTABLISHED PURSUANT TO SUBPARAGRAPH (B)(I)(A) BELOW; OR (B) FOR A TEST USING AN ENGINE

DYNAMOMETER, THE APPLICABLE MAXIMUM NOX EMISSION LIMIT PLUS 0.5 G/BHP-HR.

(A) WHERE AN ENGINE DYNAMOMETER OR VEHICLE TEST SHOWS AN APPARENT EXCEEDANCE OF

THE EMISSIONS THRESHOLD, THE PARTY CONDUCTING THE ORIGINAL TEST SHALL REPEAT SUCH TEST UNDER THE SAME

CONDITIONS AT LEAST NINE TIMES. IF THE MEAN OF THE TESTS DOES NOT EXCEED THE EMISSIONS THRESHOLD, DDC

SHALL NOT BE OBLIGATED TO TAKE FURTHER ACTION UNDER SUBPARAGRAPHS (B)(I)(B),(C), OR (E) BASED ON THE

RESULTS OF THE TESTS. IF THE MEAN OF THE TESTS EXCEEDS THE EMISSIONS THRESHOLD, THEN THE PARTY

CONDUCTING THE TESTS SHALL NOTIFY THE OTHER PARTY TO THIS DECREE WITHIN 30 DAYS OF COMPLETING TESTING,

AND DDC SHALL PERFORM THE ENGINEERING ANALYSIS AND/OR CONDUCT FURTHER TESTING IN ACCORDANCE WITH

SUBPARAGRAPHS (B)(I)(B) AND (C).

(B) IF THE TESTING CONDUCTED UNDER SUBPARAGRAPH (B)(I)(A) WAS PERFORMED USING VEHICLE TEST

EQUIPMENT, THEN DDC MAY ELECT TO CONDUCT ADDITIONAL TESTS OF THAT ENGINE USING AN ENGINE

DYNAMOMETER, PROVIDED THAT ALL ENVIRONMENTAL AND ENGINE OPERATING CONDITIONS PRESENT DURING

VEHICLE TESTING UNDER SUBPARAGRAPH (B)(I)(A) CAN BE REPRODUCED OR CORRECTED CONSISTENT WITH

SUBPARAGRAPH (B)(I)(D). IF DDC ELECTS TO CONDUCT SUCH ADDITIONAL ENGINE DYNAMOMETER TESTS, IT SHALL

PROVIDE EPA WITH AT LEAST THREE BUSINESS DAYS NOTICE PRIOR TO COMMENCEMENT OF SUCH TESTING. IF BASED

ON SUCH ADDITIONAL TESTS DDC DEMONSTRATES THAT THE ENGINE DOES NOT EXCEED THE EMISSIONS THRESHOLD,

DDC SHALL NOT BE OBLIGATED TO TAKE FURTHER ACTION UNDER SUBPARAGRAPHS(B)(I)(A),(B),(C), OR (E).

OTHERWISE, DDC SHALL CONDUCT FURTHER TESTING IN ACCORDANCE WITH SUBPARAGRAPH (B)(I)(C) AND/OR

PERFORM AN ENGINEERING ANALYSIS TO DETERMINE THE PERCENTAGE OF THE AFFECTED POPULATION THAT EXCEEDS

THE EMISSIONS THRESHOLD AND THE EMISSION LEVELS OF THE EXCEEDING ENGINES. HOWEVER, DDC MAY NOT

DETERMINE THE PERCENTAGE OF THE AFFECTED POPULATION OR THE EMISSION LEVELS SOLELY ON THE BASIS OF AN

ENGINEERING ANALYSIS UNLESS IT DEMONSTRATES THAT SUCH ANALYSIS ALONE IS SUFFICIENT UNDER THE

CIRCUMSTANCES.

(C) SUCH TESTING SHALL BE CONDUCTED AS FOLLOWS UNLESS DDC OTHERWISE RESOLVES THE ISSUE

WITH EPA OR EPA APPROVES AN ALTERNATE PROCEDURE. WITHIN 60 DAYS OF RECEIVING NOTICE OF AN

EXCEEDANCE UNDER SUBPARAGRAPH (B)(I)(A) IF EPA WAS THE PARTY THAT CONDUCTED THE TESTING, OR WITHIN 60

DAYS OF COMPLETING TESTING UNDER SUBPARAGRAPH (B)(I)(A) THAT DEMONSTRATED AN EXCEEDANCE IF DDC

CONDUCTED THE TESTING, DDC SHALL COMMENCE TESTING OF NOT LESS THAN TEN ADDITIONAL IN-SERVICE ENGINES.

DDC MAY CONDUCT THESE TESTS USING VEHICLE TESTING EQUIPMENT, OR USING AN ENGINE DYNAMOMETER, AT

DDC’S OPTION. IF ON TWO PRIOR OCCASIONS IN ANY ONE CALENDAR YEAR, DDC WAS NOTIFIED BY EPA PURSUANT

TO SUBPARAGRAPH (B)(I)(A) (OR CARB PURSUANT TO PARAGRAPH 116 (B)(I)(A) OF THE CALIFORNIA SETTLEMENT

AGREEMENT) OF APPARENT EXCEEDANCES AND ESTABLISHED THAT THERE WERE NO EXCEEDANCES OF THE EMISSION

THRESHOLD IN THE AFFECTED POPULATIONS AS A RESULT OF TESTING CONDUCTED UNDER SUBPARAGRAPH (B)(I)(C),

- 46 ­

THEN FOR THE REMAINDER OF THE CALENDAR YEAR DDC SHALL NOT BE OBLIGATED TO PERFORM FURTHER TESTING

UNDER THIS SUBPARAGRAPH, BUT NOTHING HEREIN SHALL BE CONSTRUED TO LIMIT EPA’S AUTHORITY TO CONDUCT

SUCH TESTING.

(D) THE TESTING OF ADDITIONAL ENGINES UNDER SUBPARAGRAPHS (B)(I)(B) AND (C), ABOVE, SHALL BE

CONDUCTED UNDER CONDITIONS THAT ARE NO LESS STRINGENT THAN THE INITIAL TEST IN TERMS OF THOSE

PARAMETERS THAT MAY AFFECT THE RESULT, AND, AT DDC’S OPTION, MAY BE LIMITED TO THOSE EMISSION LIMITS

AND CONDITIONS FOR WHICH APPARENT EXCEEDANCES HAVE BEEN IDENTIFIED. SUCH PARAMETERS TYPICALLY, BUT

NOT NECESSARILY, INCLUDE RELEVANT AMBIENT CONDITIONS, OPERATING CONDITIONS, SERVICE HISTORY, AND AGE

OF THE VEHICLE. PRIOR TO CONDUCTING ANY TESTING, DDC SHALL SUBMIT A TEST PLAN TO EPA FOR ITS REVIEW

AND APPROVAL. EPA SHALL APPROVE THE TEST PLAN OR PROPOSE MODIFICATIONS TO THE TEST PLAN WITHIN 10 DAYS

OF RECEIPT. WITHIN 30 DAYS FOLLOWING EPA’S PROPOSED MODIFICATIONS, DDC SHALL INCORPORATE THE

PROPOSED MODIFICATIONS; BUT IF DDC DISPUTES THE PROPOSED MODIFICATIONS, THE DISPUTE SHALL BE RESOLVED

IN ACCORDANCE WITH THE DISPUTE RESOLUTION PROVISIONS OF SECTION XVI OF THIS CONSENT DECREE. DDC

SHALL IMPLEMENT THE TEST PLAN AS APPROVED. SPECIAL CONDITIONING OF TEST ENGINES SHALL NOT BE PERMITTED.

WHERE DDC ELECTS TO CONDUCT THE ADDITIONAL TESTING UTILIZING AN ENGINE DYNAMOMETER, IT SHALL

REPRODUCE RELEVANT ENGINE OPERATING AND ENVIRONMENTAL CONDITIONS ASSOCIATED WITH THE INITIAL

EXCEEDANCE; PROVIDED, HOWEVER, THAT CORRECTION FACTORS MAY BE USED TO REPRODUCE TEMPERATURE,

HUMIDITY OR ALTITUDE CONDITIONS THAT CANNOT BE SIMULATED IN THE LABORATORY. REGARDLESS OF THE

TESTING EQUIPMENT UTILIZED, THE TEST RESULTS SHALL BE ADJUSTED TO REFLECT DOCUMENTED TEST SYSTEMS

ERROR AND/OR VARIABILITY IN ACCORDANCE WITH GOOD ENGINEERING PRACTICES.

(E) DDC SHALL PAY STIPULATED PENALTIES UNDER SUBPARAGRAPH (B)(I) FOR EACH ENGINE IN

THE AFFECTED POPULATION ESTIMATED, BASED ON AN ENGINEERING ANALYSIS OR TESTING CONDUCTED UNDER

SUBPARAGRAPH (C) AND USING STANDARD STATISTICAL PROCEDURES AND GOOD ENGINEERING JUDGMENT, TO HAVE

AN EMISSION LEVEL EQUAL TO OR IN EXCESS OF THE EMISSION THRESHOLD, AS FOLLOWS:

HHDDE

ENGINES 1 – 4,000

³ EMISSION THRESHOLD, BUT < EMISSION

THRESHOLD LIMIT + 1.5 G/BHP-HR $250 PER ENGINE

³ EMISSION THRESHOLD LIMIT + 1.5

G/BHP-HR $500 PER ENGINE

4,001-12,000 $250 PER ENGINE $250 PER ENGINE > 12,000 $100 PER ENGINE $100 PER ENGINE

LHDDE/MHDDE ³ EMISSION THRESHOLD, BUT < EMISSION ³ EMISSION THRESHOLD LIMIT + 1.5

ENGINES THRESHOLD LIMIT + 1.5 G/BHP-HR G/BHP-HR 1 – 4,000 $125 PER ENGINE $250 PER ENGINE

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4,001-12,000 $125 PER ENGINE $125 PER ENGINE > 12,000 $ 50 PER ENGINE $ 50 PER ENGINE

(II) THE STIPULATED PENALTIES SET FORTH IN THIS SUBPARAGRAPH

APPLY WHEN THE MEAN EMISSIONS OF A POPULATION OF ENGINES, IN-USE, EXCEEDS AN

APPLICABLE NOX OR NOX PLUS NMHC EMISSION LIMIT BY LESS THAN 0.5 G/BHP-HR. IN

SUCH CIRCUMSTANCES, THE UNITED STATES SHALL HAVE THE BURDEN OF PROVING, BY A

PREPONDERANCE OF THE EVIDENCE IN A DE NOVO PROCEEDING IN THIS COURT, THAT THE

MEAN EMISSIONS OF THE AFFECTED POPULATION EXCEEDS THE APPLICABLE EMISSION

LIMIT. IN DETERMINING THE MEAN EMISSION LEVEL OF AN AFFECTED POPULATION FOR

PURPOSES OF SUBPARAGRAPH (B)(II), ANY ENGINES FOR WHICH A PENALTY IS DUE OR HAS

BEEN PAID UNDER SUBPARAGRAPH (B)(I)(E) SHALL NOT BE INCLUDED IN THE

CALCULATION. IF THE COURT DETERMINES THAT THE MEAN EMISSIONS OF THE AFFECTED

POPULATION EXCEEDS THE APPLICABLE EMISSION LIMIT, THEN DDC SHALL PAY A

STIPULATED PENALTY FOR EACH ENGINE IN THE AFFECTED POPULATION AS FOLLOWS:

HHDDE ENGINES 1 – 4,000

$ PER .1 G/BHP-HR EXCEEDANCE $50 per engine

4,001-12,000 $40 per engine > 12,000 $20 per engine

LHDDE/MHDDE Engines 1 – 4,000

$ per .1 g/bhp-hr exceedance $25 per engine

4,001-12,000 $20 per engine > 12,000 $10 per engine

(iii) In any case where an emissions exceedance under Subparagraphs (b)(i) or (b)(ii) above is identified

and DDC agrees with EPA to recall or otherwise take steps to modify the affected engines to correct the emissions

exceedance, the stipulated penalties otherwise due under this Subparagraph shall be adjusted and shall be payable as

follows: the affected population for purposes of calculating the penalty amount due shall be reduced by the number

of engines modified within one year of when the stipulated penalty would otherwise be due; and the penalty, plus

interest at the rate specified in 31 U.S.C. 3717, shall be due and payable one year plus 30 days after the date when it

would otherwise be due under this Section.

(c) AECD Reporting: for failure to comply with AECD reporting requirements of Paragraph 11 or

Paragraph 25b, a stipulated penalty of $25,000 per certification application;

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(d) Defeat Device: for violations of Paragraphs 13, 18 and 25a, a stipulated penalty of $500 per

engine, provided however that if the device involved was disclosed by DDC as an AECD in accordance with

Paragraph 11, no stipulated penalty will be assessed;

(e) Submissions and Testing: stipulated penalties for each separate failure: to submit a Low NOx Rebuild

Program Plan within the time set forth in Paragraph 65; to complete any test required by the in-use testing

requirements of Section VIII.B; to submit a quarterly report within the time required by Paragraph 106 of this

Decree; or to comply with any requirement of Section XIX:

Days of Non-compliance Penalty per violation

or violation per day

1st to 30th day $100

31st to 60th day $250

After 60 days $500

(f) Low NOx Rebuild: stipulated penalties for failure to comply with the schedules in the approved

Low NOx Rebuild Plan within the time frames required by Paragraph 68:

Days of Non-compliance or Penalty per Violation

violation per day

1st to 30th day $500

After 30 days $2,000

(g) Compliance Auditor: for failure to identify a Compliance Auditor as required by Paragraph 31 of

this Decree, a stipulated penalty of $1,000 per day;

(h) Plan and Scope of Work: stipulated penalties for failure to submit a Plan or a Scope of Work

within the times set forth in Paragraphs 42, 49, 54, 58, 59, 86, 90, 91, 92 and 99 as follows for each day of delay:

Days of Non-compliance or Penalty per Violation

violation per day

1st to 30th day $250

31st to 60th day $500

After 60 days $750

(j) stipulated penalties for failure to complete any project of an approved Offset Scope of Work

within the times required by Paragraph 93 and the Scope of Work, or agreed to by the Parties, for each day of delay

for each project:

Days of Non-compliance or Penalty per Violation

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violation per day

1st to 30th day $250

31st to 60th day $750

After 60 days $1,500

(k) For failure to comply with the requirements of Paragraph 141, a stipulated penalty of $5,000 per

day per violation.

117. Upon entry of this Consent Decree, the stipulated penalty and other payment provisions of this

Consent Decree shall be retroactively enforceable with regard to any and all violations of, or noncompliance with,

the Consent Decree that have occurred after the date of filing but prior to the date of entry of the Consent Decree.

118. Stipulated penalties provided for in this Consent Decree shall automatically begin to accrue on the day

performance is due or the non-compliance occurs, and shall continue to accrue through the day performance is

completed or the non-compliance ceases. Nothing herein shall be construed to prevent the simultaneous accrual of

separate stipulated penalties for separate violations of this Consent Decree. The amounts specified in Subparagraph

116(a), (b), (d), (e), (f), and (g), shall be the maximum NCPs or stipulated penalties under those Subparagraphs for

which DDC shall be liable, whether paid to the United States, CARB, or both. Payment of stipulated penalties as

set forth above is in addition to, and the United States specifically reserves all other rights or remedies which may

be available to the United States by reason of DDC’s failure to comply with the requirements of this Consent

Decree, or any federal, state or local law or regulation applicable to DDC’s HDDEs. Payment of NCPs pursuant to

Paragraph 116(a) shall constitute compliance with the provisions of this Consent Decree applicable to the limits for

which the NCPs were paid.

119. Stipulated penalties from the date of accrual are due and payable upon demand by the United States

on or before the thirtieth day following the demand and shall be due and payable monthly thereafter. Late payment

of stipulated penalties shall be subject to interest and fees as specified in 31 U.S.C. § 3717. All stipulated penalties

shall be paid by cashiers or certified check or electronic funds transfer, payable to the “Treasurer, United States of

America,” and sent to the Office of the United States Attorney for the District of Columbia, referencing the civil

action number of this matter. A copy of the transmittal letter and check shall be sent to the United States.

120. Stipulated penalties shall continue to accrue during any dispute resolution process. Should DDC

dispute its obligation to pay part or all of a stipulated penalty, it shall place the disputed amount demanded by the

United States in a commercial escrow account pending resolution of the matter and request that the matter be

resolved through the dispute resolution procedures in Section XVI of this Consent Decree. In the event the Court

resolves the dispute in DDC’s favor, the escrowed amount plus accrued interest shall be returned to DDC.

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121. If the United States prevails in an action to enforce this Consent Decree, DDC shall reimburse the

United States for all its costs in such action, including attorney time. Claims for such costs, including attorney time,

shall proceed in accordance with to Fed. R. Civ. P. 54(d).

122. Notwithstanding any other provision of this Section, the United States may, in its unreviewable

discretion, waive any portion of stipulated penalties that have accrued pursuant to this Consent Decree.

XV.FORCE MAJEURE

123. “Force Majeure,” for purposes of this Consent Decree, shall mean any event arising wholly from

causes beyond the control of DDC or any entity controlled by the DDC (including, without limitation, DDC’s

contractors and subcontractors, and any entity in active participation or concert with DDC with respect to the

obligations to be undertaken by DDC pursuant to this Decree), which prevents timely compliance with the

requirements of this Consent Decree. The requirements of the Consent Decree include an obligation reasonably to

anticipate any potential Force Majeure event and best efforts to address the effects of any potential Force Majeure

event (1) as it is occurring and (2) following the potential Force Majeure event, such that the delay is minimized to

the greatest extent possible.

124. “Force Majeure” does not include technological infeasibility, financial inability, or unanticipated or

increased costs or expenses associated with the performance of DDC’s obligations under this Consent Decree.

125. If any event occurs or has occurred that may delay compliance with any requirement of this Consent

Decree, whether or not caused by a Force Majeure event, DDC shall notify, either in writing or orally, the United

States within 5 days of when DDC first knew that the event might cause a delay. Within 10 days thereafter, DDC

shall provide in writing to the United States an explanation and description of the reasons for the delay; the

anticipated duration of the delay; all actions taken or to be taken to prevent or minimize the delay; a schedule for

implementation of the measures to be taken to prevent or mitigate the delay or the effect of the delay; and DDC’s

rationale for attributing such delay to a Force Majeure event if DDC intends to assert such a claim.

126. DDC shall include with any notice, the documentation supporting its claim that the delay was

attributable to a Force Majeure event. Failure to comply with the requirements of Paragraphs 123 and 125 shall

preclude DDC from asserting any claim of Force Majeure for that event for the period of time of such failure to

comply, and for any additional delay caused by such failure. DDC shall be deemed to know of any circumstance of

which DDC or any entity controlled by DDC knew or, through the exercise of due diligence, should have known.

127. If the United States does not dispute that the delay or anticipated delay is attributable to a Force

Majeure event, the time for performance of the obligations under this Consent Decree affected by the Force

Majeure event will be extended for such time as is necessary to complete those obligations. An extension of the

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time for performance of the obligations affected by the Force Majeure event shall not, of itself, extend the time for

performance of any other obligation under the Decree.

128. If the United States does not agree that the delay or anticipated delay has been or will be caused by a

Force Majeure event, it will notify DDC in writing of its decision. Within 15 days of receiving written notice from

the United States of such disagreement, DDC may submit the matter to the Court for resolution. If DDC submits

the matter to the Court for resolution, DDC shall have the burden of proving by a preponderance of the evidence

that the event is a Force Majeure as defined herein, that DDC used best efforts to avoid a Force Majeure or

minimize the delay; the duration of any delay attributable to the Force Majeure; and that it met the requirements of

Paragraph 125. If, upon submission to the Court, the Court determines that the delay was caused by a Force

Majeure event, as defined herein, the delay shall be excused, but only for the period of the actual delay resulting

from the Force Majeure event. If, upon submission to the Court, the Court determines that the delay was not caused

by a Force Majeure event, as defined herein, DDC shall pay the stipulated penalties attributable to such delay, plus

accrued interest, in accordance with Paragraph 118. Any such payments shall be made within 15 days from the

court’s decision.

XVI.DISPUTE RESOLUTION

129. The dispute resolution procedures of this Section shall be the exclusive mechanism to resolve all

disputes arising under or with respect to this Consent Decree unless otherwise expressly provided for in this

Consent Decree. However, the procedures set forth in this Section shall not apply to actions by the United States to

enforce obligations of DDC that have not been disputed in accordance with this Section. In reviewing any dispute

under this Section, the Parties agree that the Court, or any hearing officer appointed under this Consent Decree,

should consider the effect of the resolution on other Settling HDDE Manufacturers. The United States and DDC

consent to intervention by CARB for purposes of resolution of disputes arising under Paragraphs 42, 49, 51, 54, 58,

59, 66, 78, 90 and/or 92 of this Consent Decree, or as otherwise necessary for the proper administration of this

Consent Decree.

130. Any dispute regarding the meaning of this Consent Decree shall be reviewed in accordance with

applicable principles of law.

131. Existing administrative hearing and other procedures applicable to currently enforceable emission

limits shall apply to any dispute which arises with respect to emission limits set forth in this Consent Decree

regarding EURO III, NTE, TNTE, Smoke (or the alternate Opacity), the NOx plus NMHC Limit, NCPs under

Paragraph 116(a), or pursuant to Paragraph 60 of this Consent Decree (regarding the requirements specified in

Section IX.A of this Decree), subject, however, to the following:

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(a) EPA shall appoint a hearing officer who shall preside at any hearing at which, under existing

regulations, an administrative law judge would otherwise preside; and

(b) Review by the Court shall be as if it were review of final agency action under 5 U.S.C. § 706.

132. Any dispute that arises under or with respect to this Consent Decree, other than the disputes subject

to Paragraph 131 of this Decree, shall in the first instance be the subject of informal negotiations between the

Parties. The period of informal negotiations shall not exceed 20 days from the time the dispute arises, unless the

Parties agree to extend the time period for informal negotiations. The dispute shall be considered to have arisen

when one Party sends the other Party a written Notice of Dispute. Judicial review of any dispute governed by this

Paragraph shall be governed by applicable principles of law.

133. In the event the Parties cannot resolve a dispute by informal negotiations under the preceding

Paragraph, then the position advanced by the United States shall be considered binding, unless, within 30 days after

the conclusion of the informal negotiation period, DDC invokes the formal dispute resolution procedures of this

Section by serving on the United States a written Statement of Position on the matter in dispute. This Statement of

Position shall include, but not be limited to, any factual data, analysis or opinion supporting that position and any

supporting documentation relied upon by DDC.

134. Within 30 days after receipt of DDC’s Statement of Position, the United States shall serve on DDC

its Statement of Position, including, but not limited to, any factual data, analysis, or opinion supporting that position

and all supporting documentation relied upon by the United States.

135. Following receipt of the United States’ Statement of Position, DDC shall have 10 days to file with the

Court and serve on the United States a motion for judicial review of the dispute; otherwise the United States’

Statement of Position shall be binding on DDC. DDC’s motion for review shall set forth the matter in dispute, the

efforts made by the Parties to resolve it, the relief requested, and the schedule, if any, within which the dispute must

be resolved to ensure orderly and timely implementation of the Consent Decree. The United States may file a

response to DDC’s motion within 10 days of service of that motion.

136. The invocation of formal dispute resolution procedures under this Section shall not extend, postpone

or affect in any way any obligation of DDC under this Consent Decree, unless the United States or the Court agrees

otherwise. Stipulated penalties with respect to the disputed matter shall continue to accrue but payment shall be

stayed pending resolution of the dispute as provided in Paragraph 120 of this Decree. Notwithstanding the stay of

payment, stipulated penalties shall accrue from the first day of noncompliance with any applicable provision of this

Consent Decree. In the event DDC does not prevail on the disputed issue, stipulated penalties shall be assessed and

paid as provided in Section XIV of this Decree.

XVII. EFFECT OF SETTLEMENT

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137. Satisfaction of all the requirements of this Consent Decree, and payment of three million one hundred

and twenty-five thousand dollars ($3,125,000) under the California Settlement Agreement, constitutes full

settlement of and shall resolve all civil liability of DDC to the United States for the civil violations alleged in the

Complaint, and for any civil violations that could hereafter be alleged under the Clean Air Act or regulations

promulgated thereunder based on: (i) the use of the injection-timing strategies described in the Complaint on Pre-

Settlement Engines; (ii) the use of electronic engine control strategies on HDDEs in accordance with Appendix B-1,

B-2, B-3 and B-4, and this Consent Decree; (iii) the use on Nonroad CI Engines manufactured before January 1,

2005 of the electronic engine control strategies in accordance with Appendix F and this Consent Decree; and (iv)

the use on urban bus rebuild kits (including electronic control reprogramming associated with such kits), of the

injection timing strategies described in the Complaint.

138. With respect to LMB Engines manufactured before July 31, 1999, EPA shall not base a determination

under Section 207(c)(1) of the Act, 42 U.S.C. § 7541, that any class or category of the Pre-Settlement or Interim

Engine does not conform to the regulations prescribed under Section 202 of the Act, 42 U.S.C. § 7521, or a

determination under Section 206(b) of the Act, 42 U.S.C. § 7525(b), to suspend or revoke a Certificate of

Conformity, on the basis that the engine contains one or more of the injection-timing strategies specifically

described in Appendix B-1 or B-2, as limited by B-4 in Model Year 2000, if all other requirements applicable to that

engine found in this Decree and the regulations are met.

139. With respect to LMB Engines manufactured before October 1, 2002, EPA shall not base a

determination under Section 207(c)(1) of the Act, 42 U.S.C. § 7541, that any class or category of the Pre-Settlement

or Interim Engine does not conform to the regulations prescribed under Section 202 of the Act, 42 U.S.C. § 7521, or

a determination under Section 206(b) of the Act, 42 U.S.C. § 7525(b), to suspend or revoke a Certificate of

Conformity, on the basis that the engine contains one or more of the injection-timing strategies specifically

described in Appendix B-2 or B-3 (after July 31, 1999), as limited by B-4 in Model Year 2000, if all other

requirements applicable to that engine found in this Decree and the regulations are met.

139a. With respect to Exclusion Engines (identified in Paragraph 16), EPA shall not base a determination

under Section 207(c)(1) of the Act, 42 U.S.C. §7541, that any class or category of Exclusion Engines does not

conform to the regulations prescribed under Section 202 of the Act, 42 U.S.C. § 7521, or a determination under

Section 206(b) of the Act, 42 U.S.C. § 7525(b), to suspend or revoke a Certificate of Conformity, on the basis that

the engine contains one or more of the injection-timing strategies specifically described in Appendix B-1, B-2 and

B-3, as limited in Model Year 2000 by Appendix B-4 (other than the first paragraph of Appendix B-4 relating to

sustained highway or high load operation, which is not applicable to the strategies in Appendix B-2 and B-3).

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140. With respect to Truck HHDDEs manufactured before October 1, 2002, EPA shall not base a

determination under Section 207(c)(1) of the Act, 42 U.S.C. § 7541, that any class or category of the Pre-Settlement

or Interim Engine does not conform to the regulations prescribed under Section 202 of the Act, 42 U.S.C. § 7521, or

a determination under Section 206(b) of the Act, 42 U.S.C. § 7525(b), to suspend or revoke a Certificate of

Conformity, on the basis that the engine contains one or more of the injection-timing strategies specifically

described in Appendix B-1, B-2 or B-3, as limited by B-4 in Model Year 2000, if all other requirements applicable

to that engine found in this Decree and the regulations are met.

140a. With respect to Nonroad CI Engines manufactured before January 1, 2005, EPA shall not base a

determination that any class or category of such Nonroad CI Engines does not conform to the regulations prescribed

under Section 213 of the Act, 42 U.S.C. § 7547, or a determination to suspend or revoke a Certificate of Conformity

on the basis that the engine contains one or more of the injection-timing strategies described in Appendix F if all

other requirements applicable to that engine found in the regulations are met.

XVIII. RIGHT OF ENTRY

141. Until termination of this Consent Decree DDC shall allow the United States, and its authorized

representatives, contractors, consultants, and attorneys access, at reasonable times and with reasonable advance

notice, to any facilities owned or controlled by DDC relating to the manufacture of diesel engines and to any

facilities owned or controlled by DDC where activities related to compliance with this Decree are being performed,

for the purpose of: monitoring the progress of activities required by this Consent Decree; verifying any data or

information submitted by DDC to the United States; inspecting records; or conducting testing. This provision is in

addition to, and in no way limits or otherwise affects, any right of entry, inspection or information collection held by

the United States pursuant to the Act or other applicable federal law or regulations promulgated thereunder.

XIX. ACCESS TO INFORMATION AND RETENTION OF DOCUMENTS

142. DDC shall preserve, for five (5) years after termination of the applicable Section of this Consent

Decree, an original or a copy of all data and final documents and records (including all electronic documents and

records, but excluding drafts, where a final version exists, and notes) and information within its possession or

control or that of its contractors or agents relating to implementation of and compliance with this Consent Decree,

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including, but not limited to, testing, analysis, production records, receipts, reports, research, correspondence, or

other documents or information related to compliance with the Consent Decree.

143. DDC shall provide to the United States, upon request, originals or copies of all documents and

information within its possession or control or that of its contractors or agents relating to implementation of and

compliance with this Consent Decree, including, but not limited to, testing, analysis, production records, receipts,

reports, research, correspondence, or other documents or information related to compliance with the Consent

Decree.

144. All information and documents submitted by DDC to the United States pursuant to this Consent

Decree shall be subject to public inspection, unless identified and supported as confidential business information by

DDC in accordance with 40 C.F.R. Part 2.

145. DDC may assert that certain documents, records and other information are privileged under the

attorney-client privilege or any other privilege recognized by federal law. If DDC asserts such a privilege in lieu of

providing documents, DDC shall provide the United States with the following: (1) the title of the document, record,

or information; (2) the date of the document, record, or information; (3) the name and title of the author of the

document, record, or information; (4) the name and title of each addressee and recipient; (5) a description of the

contents of the document, record, or information; and (6) the privilege asserted by DDC. However, no document,

report or other information required to be created or generated by this Consent Decree shall be withheld on the

grounds that it is privileged. If a claim of privilege applies only to a portion of a document, the document shall be

provided to the United States in redacted form to mask the privileged information only. DDC shall retain all records

and documents it claims to be privileged until the United States has had a reasonable opportunity to dispute the

privilege claim and any such dispute has been finally resolved in DDC’s favor.

XX. NON-WAIVER PROVISIONS

146. This Consent Decree does not pertain to any matters other than those expressly specified in

Paragraphs 7 and/or 137 of this Decree. Nothing in this Consent Decree shall relieve DDC of its obligation to

comply with applicable Federal, State and local laws and regulations, and this Consent Decree does not release the

liability, if any, of any person or entity for any civil claims other than the civil claims referred to in Paragraph 137,

or for any criminal claims.

XXI.THIRD PARTIES

147. This Consent Decree does not limit, enlarge or affect the rights of any Party to the Consent Decree as

against any third parties. Nothing in this Decree shall be construed to create any rights in, or grant any cause of

action to, any person not a Party to this Consent Decree.

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XXII. COSTS

148. Each Party to this action shall bear its own costs and attorneys’ fees.

XXIII. PUBLIC NOTICE AND COMMENT

149. The Parties agree and acknowledge that final approval of this Consent Decree by the United States is

subject to the public notice and comment requirements of 28 C.F.R. § 50.7, which requires, inter alia, notice of this

Consent Decree and an opportunity for public comment. The United States may withdraw or withhold its consent if

the public comments demonstrate that entry of this Consent Decree would be inappropriate, improper, or

inadequate. After reviewing the public comments, if any, the United States shall advise the Court by motion

whether it seeks entry of this Consent Decree. DDC agrees to the entry of this Consent Decree without further

notice.

XXIV. MODIFICATION

150. There shall be no modification of this Consent Decree without written approval by the Parties to this

Consent Decree and Order of the Court.

XXV. RETENTION OF JURISDICTION

151. This Court retains jurisdiction over both the subject matter of this Consent Decree and DDC for the

duration of the performance of the terms and provisions of this Consent Decree for the purpose of enabling any of

the Parties to apply to the Court at any time for such further order, direction, and relief as may be necessary or

appropriate for the construction or modification of this Consent Decree, or to effectuate or enforce compliance with

its terms, or to resolve disputes in accordance with the dispute resolution procedures set forth in Section XVI.

XXVI. EFFECTIVE DATE AND TERMINATION

152. This Consent Decree shall be effective upon the Date of Entry.

153. Termination of all or any part of this Consent Decree shall occur only as provided in this Section.

Termination of a part of this Consent Decree pursuant to Subparagraphs 154(a) or (b) below shall not terminate any

other part.

154. (a) The certification requirements in Section VI of this Consent Decree shall terminate as of the

earlier of December 31, 2004, or two years after the date in 2002 when DDC has received Certificates of

Conformity for all of its engine families required to meet the NOx plus NMHC Limit (the “Termination Date”),

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provided that DDC certifies to the United States, at least 30 days prior to the Termination Date, that DDC has met

all of the requirements of Paragraphs 13 through 20 and 23 through 25 of this Decree, and provided further that the

United States, prior to December 31, 2004, does not dispute DDC’s certification under the dispute resolution

provisions of this Consent Decree. If, after the date of filing of this Consent Decree, regulations under the Act are

promulgated imposing an emission standard or other requirement set forth in Section VI of this Consent Decree,

DDC shall not be liable for stipulated penalties or other payments (or interest thereon) associated with compliance

with the corresponding Consent Decree requirements for engines manufactured after the effective date of the new

regulations. For engines manufactured before the Termination Date, or before the date such new standard or other

requirement becomes effective, whichever is earlier, the stipulated penalties associated with the Section VI

requirements shall remain in effect through, and shall terminate at the end of, the Useful Life of such engines.

(b) The certification requirements in Section IX.A of this Consent Decree shall terminate as of December

31, 2005, provided that DDC certifies to the United States, at least 30 days prior to such termination date, that it has

met all of the requirements of Section IX.A of this Decree, and provided further that the United States, prior to

December 31, 2005, does not dispute the certification under the dispute resolution provisions of this Consent

Decree. Notwithstanding termination of the certification requirements of Section IX.A pursuant to this Paragraph,

requirements imposed for the Useful Life of engines subject to Section IX.A of this Consent Decree shall remain in

effect through, and shall terminate at the end of, the Useful Life of such engines.

(c) The entire Consent Decree may be terminated by further order of the Court if DDC certifies to the

United States that: (i) DDC has paid all civil penalties, interest, and stipulated penalties due under the Consent

Decree; (ii) DDC has fully and successfully completed all of the requirements of Sections VI, VI-A, VII, VIII, IX,

and X; (iii) no matter subject to dispute resolution pursuant to Section XVI remains unresolved; (iv) no action to

enforce the requirements of this Consent Decree is pending; and (v) if Sections VI and IX.A have not been

previously terminated, the requirements in Subparagraph 154(a) and (b) above have been met. Notwithstanding this

termination, the United States retains the right to enforce the Useful Life requirements set forth in Subparagraphs

154(a) and (b) above even after the termination of the entire Consent Decree, and the United States may reopen the

Consent Decree for purposes of such enforcement.

155. Any dispute regarding termination of all or any part of this Consent Decree shall be resolved pursuant

to the dispute resolution provisions of Section XVI of this Consent Decree.

XXVII. ENTIRE AGREEMENT

156. This Consent Decree contains the entire agreement between the United States and DDC with respect

to the subject matter hereof. The Parties acknowledge that there are no representations, agreements, or

understandings relating to the settlement other than those expressly contained in this Consent Decree.

- 58 ­

XXVIII. SIGNATORIES

157. The Assistant Attorney General of the Environment and Natural Resources Division of the

Department of Justice and the undersigned representative of DDC each certify that he or she is fully authorized to

enter into the terms and conditions of this Consent Decree and to execute and legally bind the Party he or she

represents.

- 59 ­

_______________________________

United States v. Detroit Diesel Corporation Consent Decree -­

Signature Page

FOR PLAINTIFF, UNITED STATES OF AMERICA

Lois J. Schiffer Assistant Attorney General Environment and Natural Resources Division U.S. Department of Justice 10th & Pennsylvania Avenue, N.W. Washington, D.C. 20530

Thomas P. Carroll (Bar No. 388593) Senior Attorney, Environmental Enforcement Section Environment and Natural Resources Division U.S. Department of Justice 1425 New York Avenue, N.W. Washington, D.C. 20005

- 60 ­

_______________________________

United States v. Detroit Diesel Corporation Consent Decree -­Signature Page

Steven A. Herman Assistant Administrator Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460

Bruce C. Buckheit, Director Air Enforcement Division Office of Regulatory Enforcement Office of Enforcement and Compliance Assurance U.S. Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460

E. Bruce Fergusson Team Leader, Vehicle and Engine Enforcement Air Enforcement Division Office of Regulatory Enforcement U.S. Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460

- 61 ­

United States v. Detroit Diesel Corporation Consent Decree -­

Signature Page

FOR Detroit Diesel Corporation,

Ludvik F. Koci, Vice Chairman Detroit Diesel Corporation 13400 Outer Drive, West Detroit, MI 48239-4001

So entered in accordance with the foregoing this ____ day of _____________, 19___.

United States District Judge

- 62 ­

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX A

DETROIT DIESEL CORPORATION ELECTRONICALLY CONTROLLED HDDE AND NONROAD ENGINE FAMILIES

APPENDIX A - DETROIT DIESEL CORPORATION ELECTRONICALLY CONTROLLED HDDE AND NONROAD ENGINE FAMILIES

On-Highway Engine (HDDE) Families

(1998 model year) S60 11.1L WDDXH11.1EHD S60 12.7L WDDXH12.7EGD S50 WDDXH08.5EJD S50 Bus WDDXH08.5FJC Turbotronic 638 WDDXH03.8C1C

(1997 model year) S60 11.1L VDD11.EJDARA S60 12.7L VDD12.EJDARA S50 VDD8.5EJDARA S50 Bus VDD8.5FJDABA Turbotronic 638 VDD3.8C8DABA S55 VDD12.EJDATA

(1996 model year) S60 11.1L TDD11.EJDARA S60 12.7L TDD12.EJDARA S60 12.7L-470 TDD12.EJDASW S50 TDD8.5EJDARA S50-315 TDD8.5EJDARW S50 Bus TDD8.5FJDABA Turbotronic 638 TDD3.8C8DASW S55 TDD12.EJDATW 6V-92TA DDEC TDD552EJ4ARW 8V-92TA DDEC TDD736EJ4ARW 6v-92TA DDEC Ethanol Bus TDD552FJBOBA

(1995 model year) S60 11.1L SDD11.EJDARA S60 12.7L SDD12.EJDARA S60 12.7L-470 SDD12.EJDASW S50 SDD8.5EJDARA S50-315 SDD8.5EJDASW S50 Bus SDD8.5FJDABA 6V-92TA DDEC SDD552EJ4ARW 6V92TA EV SDD552EJ4ASW 8V-92TA DDEC SDD736EJ4ARW

1

(1994 model year) S60 11.1L RDD11.EJDARA S60 12.7L RDD12.EJDARA S60 12.7L-470 RDD12.EJDASW S50 RDD8.5EJDARA S50-315 RDD8.5EJDASW S50 Bus RDD8.5FJDABA S50 Bus w/o converter RDD8.5FJDARW 6V-92TA DDEC RDD552EJ4ARW 6V-92TA Coach RDD552FJ4ASW 6V-92TA EV RDD552EJ4ASW 8V-92TA DDEC RDD736EJ4ARW

(1993 model year) S60 11.1L DDEC II PDD11.1FZAX S60 11.1L DDEC III PDD11.1FZD2 S60 12.7L DDEC II PDD12.7FZA7 S60 12.7L DDEC III PDD12.7FZDX S50 PDD08.5FZB7 S50 Bus PDD08.5FZK7 6V-92TA DDEC PDD0552FZG2 6V-92TA Coach PDD0552FZL9 6V-92TA Bus w/trap PDD0552FZP2 6V-92TA EV PDD0552FZV0 8V-92TA DDEC PDD0736FZHX 6L-71TA ALCC PDD0426FZF7 6v-92TA DDEC Methanol Coach PDD0552MDL4 6v-92TA DDEC Methanol PDD0552MDGB

(1992 model year) S60 11.1L NDD11.1FZA1 S60 12.7L NDD12.7FZA9 S50 NDD08.5FZB9 S50 Bus NDD08.5FZK9 6V-92TA DDEC NDD0552FZG4 6V-92TA Coach NDD0552FZL0 6V-92TA Bus w/trap NDD0552FZP4 8V-92TA DDEC NDD0736FZH1 6L-71TA ALCC NDD0426FZF9 6L-71TA Coach NDD0426FZK5 6v-92TA DDEC Methanol Bus NDD0552MDL6 6v-92TA DDEC Methanol NDD0552MDGX

2

(1991 model year) S60 11.1L MDD11.1FZA2 S60 12.7L MDD12.7FZAX 6V-92TA DDEC MDD0552FZG5 6V-92TA Coach MDD0552FZL1 8V-92TA DDEC MDD0736FZH2 6L-71TA ALCC MDD0426FZFX 6L-71TA Coach MDD0426FZK6 6v-92TA DDEC Methanol Bus MDD 0552 MDL7

(1990 model year) S60 11.1L LDD11.1FZA3 S60 12.7L LDD12.7FZA0 6V-92TA DDEC LDD0552FZG6 6V-92TA Coach LDD0552FZL2 8V-92TA DDEC LDD0736FZH3

(1989 model year) S60 11.1L/12.7L KDD12.7FZA1 6V-92TA DDEC KDD0552FZG7 6V-92T A/A DDEC KDD0552FZJ1 8V-92TA DDEC KDD0736FZH4 6L-71TA KDD0426FZF1

(1988 model year) S60 11.1L/12.7L JDD12.7FZA2 6V-92TA DDEC JDD0552F2G8 6V-92T A/A DDEC JDD0552FZJ2 8V-92TA DDEC JDD0736FZH5 6L-71TA JDD0426FZF2

Nonroad Engine Families

(1998 model year) S50 WDDXL08.5TJD S60 11.1L WDDXL11.1THD S60 12.7L WDDXL12.7TGD 6V92TA DDEC WDDXL09.0TFE 8V92TA DDEC WDDXL12.1TFE 12V92TA DDEC WDDXL18.1TFE S2000 8V WDDXL15.9TRE S2000 12V WDDXL23.9TRE

3

(1997 model year) S50 VDD8.5TJDARE S60 11.1L VDD11.TJDARE S60 12.7L VDD12.TJDARE 6V92TA DDEC VDD09.TJ4ARE 8V92TA DDEC VDD12.TJ4ARE 12V92TA DDEC VDD18.TJ4ARE S2000 8V VDD15.TJDARE S2000 12V VDD23.TJDARE 6v-92TA Ethanol VDD9.0TJ30BE

(1996 model year) S50 TDD8.5TJDARE S60 11.1L TDD11.TJDARE S60 12.7L TDD12.TJDARE 6V92TA DDEC TDD09.TJ4ARE 8V92TA DDEC TDD12.TJ4ARE 12V92TA DDEC TDD18.TJ4ARE

4

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 )

Washington, D.C. 20530 ))

)Plaintiff, ) Civil Action No.

)v. )

)DETROIT DIESEL CORPORATION )

13400 Outer Drive, West )

Detroit, Michigan 48239 ))

)Defendant. )

)

APPENDIX B-2 (PUBLIC PORTION)

OPERATING MODE INJECTION TIMING STRATEGIES

1

APPENDIX B-2

OPERATING MODE INJECTION TIMING STRATEGIES

For the fuel injection timing strategies specifically described in this Appendix B-2, the emissions limits, except the FTP Limits, in Paragraphs 14, 16 and 19 shall not apply to emissions associated with the use of these strategies, except as provided by Appendix B-4.

(The remainder of this Appendix B-2 is business confidential and filed under seal.)

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX B-3

OVERHEAT PROTECTION

APPENDIX B-3

OVERHEAT PROTECTION

For Model Year 1999 only, except as set forth in Appendix B-4, DDC may install the following AECD to protect the engine or vehicle from damage due to overheating: timing may be advanced when coolant temperature and/or intake manifold temperature rises 5° F or more above cooling fan-on temperature even if emissions exceed the applicable EURO III and NTE Limits. This feature must be inactive when the coolant temperature and/or intake manifold temperature is below 5° F above fan-off temperature. For modulated or variable-speed fans, fan-on temperature refers to the temperature at which the fan drive is fully engaged, or at which the fan is set to maximum speed; and fan-off refers to the point at which the fan drive begins to modulate off, or at which the fan is set to less than maximum speed. If the fan is not controlled directly by the engine control module, then set points for AECD activation and deactivation shall be referenced to fan-on and fan-off temperatures specified by DDC, and subject to the above temperature difference limits and fan control state definitions.

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX B-4

MODEL YEAR 2000 LIMITATIONS

APPENDIX B-4

MODEL YEAR 2000 LIMITATIONS

The AECDs in Appendix B-1 shall not be active unless engine operating conditions are generally correlatable to sustained highway operation (vehicle speed of 50 mph or greater) or generally correlatable to sustained high load operation (greater than 85% of maximum load at that RPM for a one minute rolling average or greater than 75% of maximum load at that RPM for a two minute rolling average). Such AECDs shall return the engine to the injection timing values used to meet the FTP NOx levels when engine operations return to transient conditions.

The AECD described in Appendix B-3 (correlated to coolant temperature and/or other engine operating parameter(s)) is the only timing strategy that may be employed for overheat protection. This strategy may only be employed where DDC’s specifications for cooling system, charge air cooler, and/or other requirements are such that the engine can operate without the need for such AECDs at both ambient temperatures below 100 degrees F and loads below 75 percent maximum at that RPM. Such specifications shall be determined by establishing engine cooling and other system requirements based on testing at conditions at least as severe as 75 percent load and 100 degrees F ambient air and representative operating conditions. This AECD shall be limited to the lowest practicable NOx level for the purposes of overheat protection.

Any Altitude AECD described in Appendix B-2 may not be active at pressure above 82.5 kPa (below 5500 feet equivalent) and is limited to the lowest practicable NOx level after consideration of unburned hydrocarbons, black smoke and engine protection.

Any White Smoke AECD described in Appendix B-2 to control unburned hydrocarbons shall be limited to the lowest practicable NOx level after consideration of unburned hydrocarbon emissions, and engine misfire. In addition, DDC must justify any White Smoke AECD that is active at conditions correlatable to an intake manifold temperature greater than 60 degrees F.

Any Idle AECD described in Appendix B-2 shall be limited to the lowest practicable NOx level after consideration of unburned hydrocarbon emissions, engine misfire, and engine protection and must be correlated with any relevant engine operating parameter.

Emission levels are limited to EURO III and NTE Limits when the AECDs described in Appendix B-1 are the only active AECDs. Emissions levels are limited to EURO III and NTE Limits except as follows: (i) the altitude, acceleration, misfire and overheat protection AECDs, pursuant to footnote 1 of the test protocol, to the extent needed; (ii) the White Smoke AECD for LMB Engines after July 31, 1999, shall be limited to 1.5 times the then-applicable EURO III Limits, except that, upon showing of need, higher emission limits shall be authorized; and (iii) the White Smoke AECD for Truck HHDDEs shall be limited to 1.0 times the applicable EURO III Limits, except that, upon a showing of need, higher emission limits shall be authorized.

1

2

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )

)Environment & Nat. Res. Div.950 Penn. Ave., N.W., Rm. 2143 )

Washington, D.C. 20530 ))

)Plaintiff, ) Civil Action No.

)v. )

)DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX C

TECHNICAL PROTOCOLS

APPENDIX C −−−− TECHNICAL REQUIREMENTS FOR EURO III, NTE, TNTE, SMOKE (OR ALTERNATE OPACTIY) PROTOCOLS1

1 THESE EMISSIONS LIMITS AND TESTING REQUIREMENTS ARE IN ADDITION TO ANY REQUIREMENTS APPLICABLE UNDER THE CODE OF FEDERAL REGULATIONS, AND ARE SUBJECT TO PROVISIONS FOR RECORD KEEPING, REPORTING, TESTING AND LIABILITY FOR NON-COMPLIANCE ESTABLISHED UNDER THE CONSENT DECREE. THE WAIVER OF THE REQUIREMENT TO SUBMIT TEST DATA FOR CERTAIN EMISSIONS FOUND IN 40 C.F.R. 86.094­

1. EURO III Requirements. Engines must meet the weighted average emission limit values applicable to the EURO III test set forth in this Consent Decree, when tested using the EURO III steady state test and emission weighting protocols identified as the “ESC test” in Annex III to the Proposal adopted by the Commission of the European Union on December 3, 1997.2 The modal test point definition and weighting factors will be taken directly from Annex III. Except as specifically stated in this Appendix, in all other respects testing shall be conducted in accordance with 40 C.F.R. Part 86, unless the company proposes, and EPA approves, an alternative procedure. Engines must meet the applicable weighted average emission levels when new and in-use throughout the Useful Life of the engine and during all normal operation and use.

1.1. As part of the certification process, the manufacturer must provide ESC test results to EPA. Weighted average emissions of all regulated emissions from the ESC test must comply with the applicable limits set forth in this Consent Decree. In addition to the weighted average data, the manufacturer must supply brake specific gaseous emission data for each of the thirteen test points in the ESC test, and for up to three supplemental points selected by EPA (unless EPA advises the manufacturer otherwise) and communicated to the manufacturer in a timely

23(C)(2)(I) APPLIES TO THESE PROVISIONS. EXCEPT AS SPECIFICALLY NOTED HEREIN OR IN THE CONSENT DECREE, ALL EXISTING EPA REGULATIONS AND POLICIES SHALL APPLY TO ANY TESTING CONDUCTED UNDER THIS TEST PROTOCOL. EPA MAY ALLOW EXCEEDANCES OF THE EURO III AND NOT TO EXCEED LIMITS IF THE MANUFACTURER DEMONSTRATES DURING THE CERTIFICATION PROCESS THAT THE EXCESS EMISSIONS ARE DUE TO THE REQUIREMENTS OF ENGINE STARTING, OR CONDITIONS RESULTING FROM THE NEED TO PROTECT THE ENGINE OR VEHICLE AGAINST DAMAGE OR ACCIDENT AND THERE ARE NO OTHER REASONABLE MEANS TO PROTECT THE ENGINE OR VEHICLE. IN ADDITION, DURING THE TERM OF THIS CONSENT DECREE, EPA MAY ALLOW SUCH EXCEEDANCES IF THE MANUFACTURER DEMONSTRATES DURING THE CERTIFICATION PROCESS THAT THE EXCESS EMISSIONS ARE DUE TO EXTREME AMBIENT CONDITIONS AND THAT THERE ARE NO REASONABLE MEANS OF MEETING SUCH LIMITS UNDER SUCH AMBIENT CONDITIONS. ALL PROCEDURES SET FORTH IN THIS CONSENT DECREE SHALL BE IMPLEMENTED IN ACCORDANCE WITH SOUND ENGINEERING PRACTICE.

PROPOSAL ADOPTED BY THE COMMISSION OF THE EUROPEAN UNION ON 3 DECEMBER 1997, FOR PRESENTATION TO THE EUROPEAN COUNCIL AND PARLIAMENT, TITLED A DRAFT PROPOSAL FOR A DIRECTIVE OF THE EUROPEAN PARLIAMENT AND THE COUNCIL AMENDING DIRECTIVE 88/77/EEC OF 3 DECEMBER 1987 ON THE APPROXIMATION OF THE LAWS OF THE MEMBER STATES RELATING TO THE MEASURES TO BE TAKEN AGAINST THE EMISSION OF GASEOUS AND PARTICULATE POLLUTANTS FROM DIESEL ENGINES FOR USE IN VEHICLES.” FUEL MEETING THE SPECIFICATIONS OF 40 C.F.R. 86.1313-94(B) FOR EXHAUST EMISSIONS TESTING WILL BE SUBSTITUTED FOR THE FUEL SPECIFIED IN THIS DIRECTIVE.

2

2

manner prior to the test according to the ESC protocol.3 In addition, for each of these sixteen test points, the manufacturer must provide upon request the concentrations and mass flow rates of all regulated gaseous emissions plus CO2, as well as exhaust smoke opacity ("k" value) and the values of all emission-related engine control variables at each test point. Weighted average PM shall be measured and reported by the manufacturer in the Certification Application.

1.1.1 The ESC test must be conducted with all emission-related engine control variables in the highest brake-specific NOx emissions state which could be encountered for a 30 second or longer averaging period at the given test point. The manufacturer must include a statement in the Certification Application that the test results correspond to the maximum NOx producing condition for a 30 second or longer averaging period reasonably expected to be encountered at each test point during normal engine operation and use.

1.1.2 Any regulated gaseous emissions at any of the test points, or any interpolated points in the ESC control area, shall be at or below the Not-to-Exceed Limits if within the Not-to-Exceed Region as defined in Section 2 below.

1.1.3 As part of its certification application, the manufacturer must submit a statement that its engines will comply with the applicable EURO III limit values and testing requirements during all normal engine operation and use, including the limits described in Sections 1.2-1.4.

1.1.4 For the purposes of submission of the certification application, the manufacturer shall conduct the ESC test within the temperature range of 68° F to 86° F.

1.2 For gaseous emissions, the 13 ESC test point results described in Section 1.1, along with the four-point linear interpolation procedure of the ESC test protocol (Annex III, Appendix 1, Sections 4.6, 4.6.1, and 4.6.2) for intermediate conditions, shall define maximum allowable emission limits including up to three supplemental points selected by EPA (See Figure 1). The ESC control area extends from the 25% to the 75% engine speeds, at engine loads of 25% to 100%, as defined in Annex III.

1.2.1 If the weighted composite ESC test result for any gaseous emission is lower than required in the Consent Decree, the 13 ESC test values for that pollutant shall first be multiplied by the ratio of the limit value to the composite value and then by 1.05 for interpolation allowance before determining the maximum allowable emission limits of Section 1.2.4

3 THE ESC TEST PROTOCOL INCLUDES ONLY A NOX CHECK AT THE SUPPLEMENTAL TEST POINTS. HOWEVER, UNDER THE CONSENT DECREE AND THIS TEST PROTOCOL ALL REGULATED GASEOUS EMISSIONS ARE INCLUDED. 4 THE 10% ALLOWANCE FOR NOX AT INTERPOLATED POINTS FOUND IN SECTION 6.2.3 OF ANNEX 1 OF THE DECEMBER 1997 DIRECTIVE FOR EVALUATING COMPLIANCE WITHIN THE LIMIT VALUES OF THE DIRECTIVE IS REDUCED TO 5%.

3

1.3 The weighted average ESC emissions limits described in Section 1.1 and the maximum allowable emission levels defined in Section 1.2 apply to testing of certification engines, production line engines, and in-use engines.

1.4 In addition to the steady state testing protocols of the ESC test, in accordance with

existing regulations and the provisions of the Consent Decree, EPA may require

that engines be tested under conditions that may reasonably be expected to be

encountered in normal vehicle operation and use. The engine may be tested in a

vehicle in actual use or on a dynamometer, under steady state or transient

conditions and under varying ambient conditions. Test results within the ESC

control area shall be compared to the maximum allowable emission limit for the

4

same engine speed and load to determine compliance. The engine, when operated

within the ESC control area, must comply with the maximum allowable emissions

limits.

1.4.1 Where the test conditions identified in 1.4 require departures from specific provisions of Annex III or 40 C.F.R. Part 86 (e.g., sampling time) testing shall be conducted using good engineering practice. The manufacturer shall submit a detailed description of any departures from the specific testing provisions of Annex III or 40 C.F.R. Part 86 and the justification for modifying the test procedures along with the test results submitted to EPA under testing required by Paragraph 1.4.

1.4.2 If EPA requires engine dynamometer testing by the manufacturer under non-FTP conditions, such testing shall be done at the manufacturer’s facility on existing equipment, and must be carried out only within the limits of operation of the manufacturer’s available test equipment with regard to ambient temperature, humidity and altitude. EPA may conduct its own confirmatory, production line or in-use testing at any ambient temperature, humidity or altitude.

1.4.3 When tested under transient conditions, emission values to be compared to the maximum allowable limits shall represent an average of at least 30 seconds.

1.4.4 Manufacturers shall collect test data documenting the effects of humidity and temperature on NOx and PM emissions for EPA to use jointly with engine manufacturers in establishing appropriate correction factors for NOx for humidity and for NOx and PM for temperature. One set of correction factors shall be established and used by all manufacturers. NOx emissions shall be corrected for humidity to a standard level of 75 grains of water per pound of dry air. Outside the temperature range of 68-86 degrees F, NOx and PM emissions shall be corrected to 68° F if below 68° F or to 86° F if above 86° F.

0.3.5 Until January 1, 2000, the humidity correction factors found in 40 C.F.R. Part 86 shall be used for NOx, and the interim temperature correction factors developed by the manufacturers and approved by EPA by November 1, 1998 shall be used for both NOx and PM.

5

0.3.6 Beginning January 1, 2000, the manufacturers shall use the temperature and humidity correction factors developed as follows. By December 1, 1998, the manufacturers shall submit a test plan to EPA to develop temperature correction factors for NOx and PM and humidity correction factors for NOx over a wide range of ambient temperatures and humidity. EPA shall review and approve or disapprove the plan by December 31, 1998. If EPA disapproves the plan, it shall state the reasons why, and the manufacturers shall have 30 days to revise their plan to the satisfaction of EPA or to submit the matter for Dispute Resolution under Section XVI of the Consent Decree. The manufacturer shall implement the plan as approved by EPA or directed by the Court following any Dispute Resolution proceeding. By July 31, 1999, the manufacturers shall submit the results of their testing to EPA along with their suggested temperature correction factors for NOx and PM and humidity correction factors for NOx. By September 1, 1999, EPA shall review the test results and all other data and information collected or generated in connection with testing under the approved plan and approve or disapprove the suggested correction factors. If EPA disapproves the suggested correction factors, it shall state the reasons why, and the manufacturers shall have 30 days to revise their correction factors to the satisfaction of EPA or to submit the matter for Dispute Resolution under Section XVI of this Consent Decree.

2. Not To Exceed Limits. Engines must also meet the Not To Exceed, Smoke or alternate Opacity, and Transient Load Response Limits stated in the Consent Decree and more specifically defined in the following Sections. Engines must meet the applicable Not To Exceed, Smoke or alternate Opacity, and Transient Load Response Limits when new and in-use throughout the Useful Life of the engine.

2.1. Except as described in Paragraph 2.1.2, the Not To Exceed Control Area includes

all operating speeds above the "15% ESC Speed" calculated as in Section 2.1.1,

and all engine load points at 30% or more of the maximum torque value produced

by the engine. In addition, notwithstanding the provisions of Section 2.1.2, the

Not To Exceed Control Area includes all operating speed and load points with

brake specific fuel consumption (BSFC) values within 5% of the minimum BSFC

value of the engine, unless during Certification the manufacturer demonstrates to

6

the satisfaction of EPA that the engine is not expected to operate at such points in

normal vehicle operation and use. Current engine designs equipped with drivelines

with multi-speed manual transmissions or automatic transmissions with a finite

number of gears are not subject to the 5% minimum BSFC additional NTE region.

2.1.1. The 15% ESC Speed is calculated using the formula n lo + 0.15(n hi - n lo ), where n lo and n hi are the low and high engine speeds defined in Annex III, Appendix 1, Section 1.1 of the earlier referenced December 3, 1997 Proposal of the Commission of the European Union.

2.1.2. The area below 30% of the maximum power value produced by the engine is excluded from the Not to Exceed Control Area. In addition, the area defined in either (a) or (b) below, as applicable, is excluded from the Not to Exceed Control Area for PM.

a) To the right of the line from 30% of maximum torque or 30% of maximum power (whichever is greater) at the B speed to 70% of maximum power at 100% speed (n hi ) if the C speed is below 2400 rpm (See Figure 2(a)); or

b) To the right of the line from 30% of maximum torque or 30% of maximum power (whichever is greater) at the B speed to 50% power at 2400 rpm to 70% of maximum power at 100% speed (n hi ) if the C speed is above 2400 rpm. (See Figure 2(b).)

7

Figure 2(a)

600 800 1000 1200 1400 1600 1800 2000 2200 2400

Engine Speed [r/min]

Figure 2(b)

0

200

400

600

1000

1200

1400

1600

1800

2000 En

gine

Tor

que

[ft-lb

s]

800

NTE Control Area

A B C

PM Carve-Out

70% Max Powe

All Emissions Carve-Out 30%

Max Torqu 30% Max Powe

0

50

100

150

200

250

300

350

400

450

500

PM Carve-Out

70% Max Pow

All Emissions Carve-Out 30%

Max Tor 30% Max Pow A B C

NTE Control Area

Engi

ne T

orqu

e [ft

-lbs]

50% Max Tor

2400 r/min

800 1200 1600 2000 2400 2800 3200 3600

Engine Speed [r/min]

8

2.2. Within the Not To Exceed Control Area, emissions of NOx (or NOx plus NMHC where applicable) and PM, when averaged over a minimum time of 30 seconds, shall not exceed the applicable Not to Exceed limit values specified in the Consent Decree. In addition, within the Not to Exceed Control Area, smoke and opacity shall not exceed the applicable Smoke or alternate Opacity limit values specified in the Consent Decree. In accordance with existing regulations and provisions of the Consent Decree, EPA may require that engines be tested under conditions that may reasonably be expected to be encountered in normal vehicle operation and use. If EPA requires engine dynamometer testing by the manufacturer under non-FTP conditions, such testing shall be done at the manufacturer’s facility on existing equipment, and must be carried out only within the limits of operation of the manufacturer’s available test equipment with regard to ambient temperature, humidity and altitude. EPA may test the engine in a vehicle in actual use or on a dynamometer, under steady state or transient conditions and under varying ambient conditions.

2.2.1 The Not To Exceed and Smoke or alternate Opacity limit values apply to certification, production line, and in-use engines.

2.2.2 As part of its certification application, the manufacturer must submit a statement that its engines will comply with the applicable Not To Exceed and Smoke or alternate Opacity limit values under all conditions which may reasonably be expected to be encountered in normal vehicle operation and use.

2.2.3 The interim correction factors to be established pursuant to Section 1.4.5 shall apply until January 1, 2000. Beginning January 1, 2000, the correction factors developed in accordance with Section 1.4.6 shall apply. Correction factors shall be used as follows:

2.2.3.1 Prior to October 1, 2002, NOx emissions shall be corrected for humidity to a standard humidity level of 75 grains of water per pound of dry air. Outside the temperature range of 68-86 degrees F, NOx and PM emissions shall be corrected to 68° F if below 68° F or to 86° F if above 86° F.

2.2.3.2 On and after October 1, 2002, NOx emissions shall be corrected for humidity to a standard humidity level of 50 grains if below 50 grains, or to 75 grains if above 75 grains. NOx and PM emissions shall be corrected for temperature to a temperature of 55° F if below 55° F or to 95° F if above 95° F. No temperature or humidity correction factors shall be used within the ranges of 50-75 grains or 55-95° F.

2.3 Within the Not To Exceed Control Area, engines may not exceed the Transient Load Response Limit set forth in the Consent Decree. In accordance with existing

9

regulations and provisions of the Consent Decree, EPA may require that in-use testing be done under conditions which may reasonably be expected to be encountered in normal vehicle operation and use. If EPA requires engine dynamometer testing by the manufacturer under non-FTP conditions, such testing will be done at the manufacturer’s facility on existing equipment, and must be carried out only within the limits of operation of the manufacturer’s available test equipment with regard to ambient temperature, humidity and altitude. EPA may test the engine in a vehicle in actual use or on a dynamometer, and under varying ambient conditions.

2.3.1 The Transient Load Response Limit values apply to certification, production line, and in-use engines.

2.3.2 As part of its certification application, the manufacturer must submit a statement that its engines will comply with the applicable Transient Load Response Limit under all conditions which may reasonably be expected to be encountered in normal vehicle operation and use.

2.3.3 The temperature and humidity correction factors developed in accordance with Section 1.4.6 of this Appendix shall be used as follows. NOx emissions shall be corrected for humidity to a standard humidity level of 50 grains if below 50 grains, or to 75 grains if above 75 grains. NOx and PM emissions shall be corrected for temperature to a temperature of 55° F if below 55° F or to 95° F if above 95° F. No temperature or humidity correction factors will be used within the ranges of 50-75 grains or 55-95° F.

2.4 The transient load response test sequence is as follows: beginning at any point within the Not To Exceed Control Area, the engine fuel control shall be moved suddenly to the full fuel position and held at that point for a minimum of two seconds.

2.4.1 When tested on a dynamometer, this sequence shall be carried out at a constant speed setting. When tested in a vehicle, engine speed will be determined by the characteristics of the vehicle being tested.

2.4.2 The test sequence of Section 2.4 may be repeated if, for example, necessary to obtain sufficient sample amount for analysis.

3. Supplemental Emissions Test Smoke Measurements. Supplemental emissions tests may require steady-state or transient smoke measurements. Steady-state smoke measurements may be conducted using opacimeters or filter-type smokemeters. Opacimeter types include partial-flow and full-flow. Only full-flow opacimeters may be used to measure smoke during transient conditions.

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3.1 For steady-state or transient smoke testing using full-flow opacimeters, equipment meeting the requirements of CFR 40, Part 86, subpart I “Emission Regulations for New Diesel Heavy-Duty Engines; Smoke Exhaust Test Procedure or ISO/DIS­11614 “Reciprocating internal combustion compression-ignition engines ­Apparatus for measurement of the opacity and for determination of the light absorption coefficient of exhaust gas” is recommended.

3.1.1 All full-flow opacimeter measurements shall be reported as the equivalent % opacity for a 5 inch effective optical path length using the Beer-Lambert relationship.

3.1.2 Zero and full-scale (100% opacity) span shall be adjusted prior to testing.

3.1.3 Post test zero and full scale span checks shall be performed. For valid tests, zero and span drift between the pre-test and post-test checks shall be less than 2% of full scale.

3.1.4 Opacimeter calibration and linearity checks shall be performed using manufacturer’s recommendations or good engineering practice.

3.2 For steady-state testing using filter-type smokemeter, equipment meeting the requirements of ISO-8178-3 and ISO/FDIS-10054 “Internal combustion compression-ignition engines – Measurement apparatus for smoke from engines operating under steady-state conditions – Filter-type smokemeter” is recommended.

3.2.1 All filter-type smokemeter results shall be reported as a filter smoke number (FSN) that is similar to the Bosch smoke number (BSN) scale.

3.2.2 Filter-type smokemeters shall be calibrated every 90 days using manufacturer’s recommended practices or good engineering practice.

3.3 For steady-state testing using partial-flow opacimeter, equipment meeting the requirements of ISO-8178-3 and ISO/DIS-11614 is recommended.

3.3.1 All partial-flow opacimeter measurements shall be reported as the equivalent % opacity for a 5 inch effective optical path length using the Beer-Lambert relationship.

3.3.2 Zero and full scale (100% opacity) span shall be adjusted prior to testing.

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3.3.3 Post test zero and full scale span checks shall be performed. For valid tests, zero and span drift between the pre-test and post-test checks shall be less than 2% of full scale.

3.3.4 Opacimeter calibration and linearity checks shall be performed using manufacturer’s recommendations or good engineering practice.

2.4 Replicate smoke tests may be run to improve confidence in single test or stabilization. If replicate tests are run, 3 additional valid test will be run, and the final reported test results must be the average of all the valid tests.

2.5 A minimum of 30 seconds sampling time will be used for average transient smoke measurements.

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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX D

IN USE TESTING PROCEDURES

APPENDIX D −−−− IN-USE TESTING PROCEDURES

A. Selecting Test Vehicles andProcess to be Used for In-Use Testing

1. DDC shall test at a minimum four vehicles in each engine family selected by the United States using the mobile monitoring technologies agreed to in Phase I. The United States will identify engine families for testing not later than June 1 of the calendar year corresponding each model year. In general, the United States will select 3 engine families per model year for testing.

2. These four vehicles shall represent a mix of mileages within the statutory Useful Life of the engines, and shall be tested in a manner consistent with the test procedures and driving routes identified in Phase II of this project. In addition, two of the vehicles shall be reprocured by DDC and retested over the same road routes when the vehicles have accumulated over 150% of statutory Useful Life mileage.

3. DDC may rely on fleet contacts and agreements for supply of test vehicles, or may identify test vehicles through any other sources including contractor services. However, the four test vehicles for each engine family must come from at least two different sources. Within an identified fleet, engines shall be randomly selected for testing.

4. For vehicles with fifth-wheel trailering capability and a GVWR of 80,000 lbs or more, the route shall be driven with an appropriate trailer loaded to yield a Gross Vehicle Weight (GVW) of approximately 60,000 lbs. A second run over the same road route shall be run with the vehicle loaded to approximately 80,000 lbs. GVW. Testing of fifth-wheel equipped trucks at GVW’s other than specified above (such as trucks rated below 60,000 - 80,000 lbs. GVWR) shall be conducted with the vehicle loaded to within 5% of GVWR (unless an alternate weight is approved by the United States prior to testing for good cause shown).

5. For non-fifth-wheel vehicles (i.e. school buses, vocational trucks, straight trucks, etc.), the test routes shall be driven once with the vehicle loaded to within 5% of GVWR (unless an alternate weight is approved by the United States for good cause shown). The GVW must be reported with the test results. In no cases shall a vehicle be loaded so as to exceed the maximum GVWR or any axle weight limits.

6. Notwithstanding any test procedures developed in Phase II of this project, the driver of the test vehicle shall only have information normally available to an operator of the vehicle. The driver shall not have access to any displays or other information about which vehicle operating parameters will be monitored, and shall have no additional information during the road testing except those normally available to the operator of the vehicle.

B. Test Deadlines and Other Provisions

1. Testing of the four vehicles within statutory Useful Life shall be completed within thirty months of selection of the engine family by the United States. Retesting of the two vehicles over 150% of statutory Useful Life mileage shall be completed within forty-two months of selection of the engine family by the United States.

2. The United States may observe any portion of the test program. The Company shall designate a point of contact through which the United States can correspond regarding all aspects of this program.

3. Any adjustments or other pre-test maintenance of test vehicles shall be approved in advance by EPA.

4. Results of the compliance monitoring shall be reported to the United States on a monthly basis throughout the duration of this phase, and shall include for each test the engine serial #, rated horsepower, rated speed, engine calibration, test date, start time, test GVW, starting humidity and starting ambient temperature. In addition, the results shall include the emissions, engine speed, engine torque, fuel injection timing, oil temperature, coolant temperature, and intake manifold temperature, and other reasonable parameters requested by EPA for specific vehicle/engine applications on a second-by-second basis for the entire test.

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX E

ADDITIONAL OFFSET PROJECTS

APPENDIX E – ADDITIONAL OFFSET PROJECTS

1. Advanced Research and Development Project: DDC will initiate advanced research activities in order to demonstrate the ability to achieve reduced NOx from heavy-duty diesel engines with a goal of achieving NOx reductions to 1.5 g/bhp-hr. DDC will investigate a variety of possible technologies, evaluating their potential to reduce NOx emissions at all operating conditions. Technologies to be evaluated include: advanced active catalyst research; advanced fuel injection and combustion strategies; and the study of synthetic diesel fuel emission impacts. The most promising technologies will be demonstrated where practicable.

Financial Commitment: Three million eight hundred and fifty thousand dollars ($3,850,000)

1. Additional Projects Following Public Comment: An additional one million seven hundred and fifty thousand dollars ($1,750,000) is reserved for potential projects identified as a result of public comment pursuant to Paragraph 149 of the Consent Decree.

3. California Projects: An additional one million four hundred thousand dollars ($1,400,000) will be dedicated to projects for the State of California.

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIA

)UNITED STATES OF AMERICA )U.S. Department of Justice )Environment & Nat. Res. Div. )

950 Penn. Ave., N.W., Rm. 2143 ))

Washington, D.C. 20530 ))

Plaintiff, ) Civil Action No. )

v. ))

DETROIT DIESEL CORPORATION )

13400 Outer Drive, West ))

Detroit, Michigan 48239 ))

Defendant. ))

APPENDIX F-3

MODEL YEAR 2000 LIMITATIONSFOR NONROAD CI ENGINES

APPENDIX F-3

MODEL YEAR 2000 LIMITATIONSFOR NONROAD CI ENGINES

Any hot operation AECD described in Appendix F-2 that advances injection timing beyond the base values applicable for certification testing shall be limited to the lowest practicable NOx level for the purposes of overheat protection.

Any Altitude AECD described in Appendix F-2 may not be active at pressure above 82.5 kPa (below 5500 feet equivalent) and is limited to the lowest practicable NOx level after consideration of unburned hydrocarbons, black smoke and engine protection.

Any White Smoke AECD described in Appendix F-2 to control unburned hydrocarbons shall be limited to the lowest practicable NOx level after consideration of unburned hydrocarbon emissions, and engine misfire. In addition, DDC must justify any White Smoke AECD that is active at conditions correlatable to an intake manifold temperature greater than 60 degrees F.

Any Idle (including Parking Brake) AECD described in Appendix F-2 shall be limited to the lowest practicable NOx level after consideration of unburned hydrocarbon emissions, engine misfire, and engine protection and must be correlated with any relevant engine operating parameter.

In addition, injection timing values shall not exceed the base values applicable during certification testing, except as follows: (i) injection timing values may be advanced as needed for engine starting AECDs, consistent with current regulatory requirements and limiting NOx emissions to the lowest practicable level; (ii) injection timing may be advanced as needed for altitude, acceleration, misfire, White Smoke and overheat protection AECDs, as needed and limiting NOx emissions to the lowest practicable level.